I'm getting a cheap PC (Duron 1300) soon to run some older games on it. I want to connect the PC and my iMac by Ethernet and then run MS Remote Desktop on my iMac to run the games. By doing this, I want to save an extra display. Is this possible?
Although this will work, I think you are going to be more than dissapointed with the results, especially if playing games. Remote Desktop is meant to be used as a server tool or remote help system. You will get frame rates around 10 at 640x480. Basically, you'll have better luck playing the games on your mac. Do yourself a favor and buy a good monitor, you can get them for under 200 now anyways.
I second saabmp3's thoughts. Another idea would be to sell your current display and get one with two connectors (e.g. DVI + VGA). Almost all good 17" displays seem to have at least two connectors these days anyway.