When is this update most probably going to be anyway? End of January or later?
Well this is how I see it: if it is in January, it should be coming Tuesday. This is the last Tuesday of January and this is the moment at which iLife '09 will be released. So its either with that, but seeing how little rumor there has been around the new iMac, I think that might be a bit of a dream. My guess is still Q1 09 but besides coming Tuesday, it might be any Tuesday till the end of Q1. Don't think they'll wait for WWDC, like someone here already said, WWDC isn't a consumer show, so Xserve might get an update there as well as the Mac Pro, but the Mac mini and iMac are so much overdate, there have been so many rumors about the new chipsets and stuff. I say this Tuesday of somewhere in the end of Feb.
As for the iMac; don't think there'll be a design update. They've been streamlining their entire productline to that computer. I am thinking of a external keyboard with the silver/black finish like on the new MB's. Do very, very, VERY much hope they put in a higher end top graphics card in there than they do in the MBP (9600), else we'll be going south performance wise from the 8800GS
And about the quad core thing; not that sure they'll put that in, maybe a BTO option on the topmodel, but even that. Intel core's are finally getting a bit less heat expelling and this makes it possible for Apple to put in faster dual cores. And as some said before, even now, dual cores still aren't used 100%, so quad will underperform alot, unless they figured something out in Snow Leopard.
Offtopic-ish:
My guess for the top of the line iMac:
24" LED screen
1 FW800
3 USB2.0
1 TB
4 GB DDR3
3,4 GHz dual core/possible quad core as CTO at 2,8/2,93 GHz
9400+9800 useable at the same time (Hybrid-SLi)/ 1 9800GTX+ (energy efficient model of the GTX). maybe the Gfx is a CTO option as well as the 4 GB but something like this isn't unthinkable