I thought about it my all the step throughs I read made it look too complicated.
I thought the same thing on my iMac '08 though I was faced with the same price as you for them to replace a 320gb HDD. I bit the bullet and went for it myself, to be perfectly honest, if you follow the steps on ifixit.com or anywhere else the process is really not that hard nor difficult (other than the removing the LCD part which I recommend having a second set of hands around to just hold that part while you make the switch).
I would say the difficulty of replacing the HDD in an iMac is about a 6/10 (10 being most difficult). it's worth a shot.
EDIT: It's not that hard, unless you don't know a RAM stick from a USB port, and then, I'd recommend you let Apple do it.