it depends on the iMac
pre iSight have 2 serviceable slots, so 2x1GB is fine.
iSights have a 512mb built in which can't be changed and you can add upto 1GB in the 1 serviceable slot.
and the new intel iMacs again have 2 fully serviceable slots so again 2x1GB is right.
when they moved to iSight iMacs they began using SO-DIMM memory, this is also used in the intel macs.