Well, as someone who doesn't care about the graphics card, but who wants a nice and compact all-in-one which won't take up too much space on the desk, this is perfect for me. My 800mHz iBook is fine for my basic needs, so the new iMac is more than adequate, for what I consider a great price. Heck, my 'main computer' at the moment is an ancient Win98 Dell with 128mb of RAM which crashes multiple times per day, and I don't really need much more power than that.
In all seriousness, I am part of the target audience for the new iMac. I know that people are saying 'well, why bother with the iMac, when your needs are fulfilled by the eMac?'; but I prefer the size and design of the iMac, and know that there'll be a time in the future when I'll be glad for the extra processing speed. It's not that the eMac isn't currently adequate for me and users like me, but that it might not be in the future. I can't justify the purchase of a PowerMac, but I can justify the purchase of an iMac.
And yes, I have a 20" on order