My dad's got a 27" machine at work and it looks sweet as anything, but sometimes you can get lost in the screen space. I found this with the Mac 30" monitors as well (which is why I prefer my 22"s).
My mum got a 21.5" unit to replace her dead iMac 4 and I think it's a lovely size. Screen is not too big but still gots lots of space to do stuff (email and Intertrons in her case).
She's got an iPad as well; the two complement each other very well.
@RR, why not get a Mac Pro and a couple of monitors instead of an iMac? the Mac Pro line are the only machines from Apple I genuinely desire (simply because of their nice build quality, upgradability, and ludicrous specs; I'll throw the OS out
) and at least with a Mac Pro a future upgrade path is available.
Plus multimonitor goodness.
/see, not always a zealot - I can be reasonable