Weeeeell, I think the answer is slightly more complex!
- Can you afford to upgrade computers regularly? If so, how regularly?
- While your current computer may be working fine, do you consider the performance just part of the Apple experience? Would you *like* to replace your white iMac with an aluminium one?
- While your current computer may be working fine, do you wish you could do a few things faster? Is there a game you might like to try but never had got around it it?
Etc etc.
Personally I think upgrading a computer every 3 years is a good schedule. I can't afford to buy the latest and greatest every time something comes out, but I find that 3 years is about the time when I start to notice things aren't as fast as they used to be - you buy a new bit of software and it's just a tad sluggish, or perhaps that fullscreen Quicktime movie isn't very smooth.
I also think that you can get complacent - you may think you don't need any extra speed, that everything is whizzy and fast, but then you jump on a brand new machine 2-3 years NEWER than your current one and the difference is instantly noticeable.
So I think you just need to add all these factors up - can you afford it, do you *want* a new one for performance or looks or both.
Personally I'd definately transition from a PPC to an Intel Mac, because it is quite a leap. Then settle in with your new iMac until say 2009-10 when it's time to buy the next one.
Just my thoughts. Hope that is of some use.