Ordered imac on Sunday but has not shipped yet should I be cancelling it and order again next week or will this update not be worth the bother
First, how urgent is your need? If not very urgent, I'd cancel.
If there's an update (and it's still in the category of rumor), at a minimum it'll support USB 3.0 which provides cheaper high speed connectivity than Firewire 800 or Thunderbolt.
And even if you look at it and go "meh", there will probably be current models in the clearance area for a discount. Won't be a huge discount, but money is money.
Of course, this rumor may not be true, so next Tuesday the same choices will be there for iMacs as now, so you just lose some time.
If you don't cancel - let us know if your iMac is delayed in shipping by a week. If so - they're probably holding the order and will give you the newer model. Which will be pretty good confirmation that there are iMac updates. (Apple often holds old orders when a new product is about to be announced, to avoid dealing with returns.)