My cousin upgraded his Rev A imac to a 600 mhz G3. IIRC there may be higher speed increases if you stay G3. Of course you lack the altivec core which is helpful to apps that use it.
I say save your cash though, things in the new Panther that use the quartz extreme portion of video acceleration probably won't work with that Mac's video card.
Things like Exposé are real nifty with the quartz extreme. If you save for a bit you can get the older G4 towers for cheap.
I'd also keep an eye on Zones/MacWarehouse/macmall and the like. They have inventory they're gonna need to clear out.
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