Robin, I wouldn't spend the extra on the ram from apple. You can get it far cheaper and it doesn't affect your warranty
I'm going for
27 inch
3.4 i7 (thinking if i go big it might take me 3-4-5 years to outgrow it)
2gb grahpics card
2tb hard drive
Magic mouse with numeric keyboard
4th ram then upgrade afterwards
3 years apple care
Jay and Robin, it might look expensive, but I'd seriously consider specifying an SSD drive over a faster processor, even if it means going for the entry level i5 chip. The OS and your applications will be installed on the SSD, and your serial drive is used purely for storage. I bought six iMacs for the studio in March, and Apple (amongst others) advised this was the most significant way to increase the machines performance in everyday use.
As Robin says, iMacs are so powerful these days that even an entry level machine will be more than sufficient for most people, for a long time.