Hi Rose,
That configuration should be fine to get you rolling along nicely.
Eventually, you might want to upgrade the RAM to 2 GB when you start getting into making movies, but for now I think you'll be fine with 1 GB.
Upgrading the VRAM to 256MB may not be a high priority for the usage you've indicated, but I would think about it since you can't upgrade later.
Apple Care is SO reasonable for this machine, that would be my only additional recommendation, but you can buy that any time before the 1st year is up.
We've already established that the 17" iMac is more than enough computer for your needs, but take a good hard look at the base 20" model simply for viewing pleasure.
If you or anyone in your family qualifies for the education discount, that could
make quite a difference in your final decision.
Simply taking one photography course at your local community college is enough
to qualify you for those savings.