If you're asking yourself this question, you'll find some facts here which will help make up your mind. If cost is not the deciding factor, consider screen size and processing power as your main decision criteria.
Start with the gargantuan 27-inch iMac screen. You probably have a good idea where the iMac will be placed in your office or home. Measure the space to see if it will physically fit and consider how near or far you'll be seated from the screen. In any case, go to an Apple store or reseller to check it out.
Remember: the screen is huge. The 2560 by 1440 resolution has so many pixels that you can play high-definition (HD) 1080p movies in native resolution and still have about 77% free space on your desktop. To watch full screen movies, the iMac will need to upscale the HD movies. At 109 pixels/inch density, make sure that your eyes will still be able to see the small type without fatigue (you may want to adjust system preferences to a default larger type).
The size of the 27" iMac screen is great for people who work with multiple windows opened side-by-side or enjoy viewing movies from a distance. If you really need to hang the screen from a wall (the 27" has a VESA wall mount) or want to use the iMac as external monitor, the 27-inch model is for you.
Normal mortals resistant to the Siren's Call, will be very happy with the size of the full HD equivalent 1920x1080 screen resolution of the 21.5" iMac. That is still over 2 million pixels of glorious color.
Processing power
I'm talking graphics processing unit (GPU) and central processing unit (CPU). The NVIDIA GeForce 9400M graphics processor in the basic 21.5-inch iMac will play HD movies without skipping and runs all iLife apps. If you want to future proof your iMac to greater extent, run pro apps from Apple or play high-frame rate games, I recommend you invest in a dedicated graphics card.
The higher priced 21.5" model comes with an ATI Radeon HD 4670 graphics processor with 256MB of memory, which is the same GPU installed on the basic 27-inch iMac. Since the GPU in the 27" iMac has more screen to fill, games will run faster on the 21" model. To beat the gaming frame rates on the 21.5-inch iMac, you'll at least have to order the basic 27" model with the optional ATI Radeon HD 4850 graphics card.
Both 21.5" iMacs and the basic 27" iMac come with a dual core 3,06 GHz Intel Core 2 Duo processing chip. The same chip which was built into the former high-end 24" iMac. For most people, the performance of this chip is more than sufficient for any number crunching tasks you will throw at it in daily life.
For maximum processing power, only the high-end 27-inch iMac will do. It comes with a 2.66GHz Intel Core i5 quad-core processor, which can be upgraded to an even more powerful Core i7 chip. Once Mac 10.6 Snow Leopard technologies have been included into more apps, you will see a performance boost for these 4-core chips. Presently the real-life performance isn't stellar compared to the 21.5" iMacs.
Conclusion
The 21.5" iMac is probably the sensible option for many people, but the lure of having the largest LED-backlit computer screen on the block may be too hard to resist. I first ordered the 27-inch iMac, then cancelled the order and went for the love-it-to-bits 21.5" model. No regrets.
