Well, yes, if you intend to use dial-up. The new iMac G5 got rid of the modem to help them keep costs down ... modems actually require quite a lot of patent and government license costs which make including a modem several times more expensive than the cost of actually producing one.
Well that depends, if u wanna be like me (weird/geek), have the 20" iMAC and get a carry case for it to make it sorta portable...and shift form one place to another where phone lines will be available, then modem sure helps. But i understand that very few people are like me (weird/geek) and wouldnt make sutch a use for the iMacG5.