If you're doing design work, you really should be working on a CRT, so that alone should tell you not to get an iMac. LCD's still aren't great for color reproduction and if you plan on doing print work, then color accuracy is very important.
If you can stretch your budget a bit, I would recommend getting a 20.1" widescreen monitor (such as that viewsonic one for $320). Also, the video card can definitely be downgraded.
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