I find the C2D iMac absolutely fine. US$580 sounds like a bargain. I bought the 27" iMac only for two reasons: I gave the 20" iMac to my mother to replace a WindowsXP machine and I had an itch to upgrade.
It has a proper discrete graphics chip, the HD 2400, that handles dual monitors with the internal screen at 1680x1050 and an external 1920x1080 screen beautifully.
For business apps - well, I run heavy weight development environments and VMWare virtual machines. I find it perfectly acceptable, your mileage might vary depending on what exactly you want to do. I'd say you'll be able to run everything, but obviously if you want to open a 5GB image in Photoshop then it's going to start swapping to disk and slowing down.
I do have some issues with the 20" iMac when compared against my 27" i7:
* the 128MB graphics chip hits its limit with modern games. e.g. not enough memory to run Civilization 5. Graphics memory isn't a problem for anything except games.
* the 4GB RAM limit. I only hit this when I want to run multiple virtual machines - Windows Server can suck up a fair chunk of RAM.
* the screen panel is notably inferior to the 27" iMac.
If you're going to run a VM, get 6GB of RAM, it works. MBA has worse CPU and I've seen plenty of people doing much heavier stuff with their MBAs. The CPU isn't bottlenecking anything in your usage.
The iMac you're looking at supports up to 1920x1200 resolution in external monitor in both, extended and mirror mode.
Excellent, I found this one for $679 w/o keyboard or mouse but based on everyone's comments it should do well. I have some 2x2GB DDR2 RAM so I'll upgrade that and put a 1TB drive in and see how it does.
MFG: APPLE
MFG Part: MA878LL/A
Features:
24" widescreen TFT-LCD display with up to 1920 x 1200 resolution wide 178/176 degree horizontal and vertical viewing angles 380 cd/m brightness 750:1 contrast ratio
320GB Serial ATA hard drive (7200 rpm)
8x8x8 DVD+RW 8x6x8 DVD-RW 24x16x24 CD-RW
ATI RADEON HD 2600 PRO graphics with up to 256MB GDDR3 memory mini DVI output supports DVI, VGA, S-video, and composite video connections via optional adapter (not included)
2 FireWire ports (one 400 Mbps, one 800 Mbps) and 5 high-speed USB 2.0 ports (3 on display, 2 on keyboard) built-in Bluetooth 2.0 + EDR (Enhanced Data Rate) module
Built-in high-speed AirPort Extreme wireless LAN card (802.11b/g/n) built-in 10/100/1000Base-T Gigabit Ethernet LAN with RJ-45 connector
Built-in stereo speakers with 24W digital amplifier
Built-in, iSight Web camera and built-in microphone for video chatting and Web conferencing
Specifications:
Processor: Intel Core(TM)2 Duo Desktop
Processor Speed: 2.4GHz
System Bus: 800MHz
Cache Memory: 4MB at die Level 2
System Memory (RAM): 1GB
System Memory (RAM) Expandable To: 4GB
Type of Memory (RAM): DDR2 SDRAM