Just want to add to my original post, buy the latest you can. In technology terms, never buy used products older than half a year. New technologies are released quickly, Apple being the fastest.
By previous gen, do you mean "Penryn" or "Merom(i think?)". You usually can tell by the ram speed "800mhz vs. 667mhz". If it's the later then I'd say get new but if it's a penryn, I'd say get it.
This recent update was hardly a speed bump IMO and the considering the nVidia 9400 is still slower than the previous ATI 2600.
Check out the refurb store, I just picked up the Refurb 2.8 "Penryn" for $1199. Sure it's not faster (but not by much in terms of CPU) then the newest high end iMac, but I saved $800.
You also have to count in the performance of the 8800GS vs. ATI 2600, in which the 2600 performed BETTER than the 8800 for Core Image apps, but the 8800 stomps it in games.
From what I understand (which I may be false) is that the new GT130 is just a re-branded 9800 series GPU, and the 9800 series is slightly better than the 8800.
All in all, if you absolutely want to most power today, then get the new high end iMac with the ATI 4850 but it's going to cost you, and to me it wasn't worth the $800 premium for a slightly faster CPU and a way faster GPU. if not then I think the best value is the refurb 2.8 w/ ATI 2600.