Well for me this iMac is working great and i'm happy with it. Conan looks good enough and performs great on medium with tweaks. After turning off shadows I put some other settings on high and it still runs good. Having all settings on High is playable most of the time, but i'd prefer it to be smoother. Considering the 8800 card in the iMac seems to be some kind of modded laptop version I think that's pretty freakin awesome performance.
But if you want to play it with everything maxed out and get decent fps at a high resolution I can almost guarantee you can build a better performing PC for the cost of an iMac. I'm thinking you need more than one video card in Crossfire or SLI to get smooth performance at 1920x1200 with maxed out settings.
The funny thing is mate, that actually SLI/Crossfire and DirectX10 is not supported yet!
May I ask what settings you did?
Did you use Vista 64 bit?(and do you have 4 gigs of ram?)