I have a year 2000 Ruby slot load iMac that is still in use once a week for backups and compatibility building and testing. It has 1 GB RAM, a 120 GB disk, and an AirPort card. The machine runs OS/X 10.4.11 Tiger and uses DropBox to help synchronize files.
Compared to my Core i7 3.4 GHz quad Linux box, the iMac runs my C++ applications at 1/182 the speed -- but always gets the same results.
The old iMac does have some advantages over Apple's latest iMac models. The power switch is handily mounted on the front of the machine and it also serves as an run/sleep indicator lamp. The iMac also has two headphone jacks, not just one, and they're also front mounted. The twin speakers are good sized and aimed directly at the user. The USB ports are placed conveniently on the right side of the iMac for easy access. There are two FireWire ports, also on the right with the Ethernet port for easy access. There's an audio input jack in addition to the integrated microphone. There's an optical drive, also mounted on the front. The optical drive, the disk drive, the RAM, and the lithium battery can all be serviced with little difficulty or a return to Apple. The iMac keyboard has easily removed key caps for those like me who prefer a Dvorak key map. There's a built-in modem, a very handy feature in the Old Days and which can still be used today. With no fan, the machine is absolutely silent. A VGA port lets me mirror the display to a second monitor without the need for an adapter. And the iMac has a nice integrated handle for moving the machine. So Apple can do a good job when they want.
The hockey puck roller ball mouse was poor, but you can't have everything.