It seems that I'm on a roll these days, which is why you haven't heard from me for a while. To start, I've got a proofreading gig that started on the 26th of February and which was yesterday extended to the 23rd of this month, which makes me an honest working man for the time being
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On the iMac, upgrade the RAM to at least 1GB, or 1.5. But, 1GB for sure.
And if you're going to run Windows, get Parallels Desktop:
http://www.parallels.com/products/desktop/
What's great about that app, is that it will virtualize just about any OS. You can even run a virutual version of Linux Ubuntu:
http://www.ubuntu.com/
The great thing about Parallels is that you don't need to reboot, you just run whatever other OS you want in a virutal window on your own OS X desk top.
Check into it.
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