The current iMac G4s sport 2 firewire ports. Some of the older ones will have only one. I'm not sure if the oldest iMacs featured firewire at all. ???
I would highly recommend using a firewire drive if you have the port for it. Firewire is many times faster than USB for data transfer, which is especially important for CD-burners and hard-drives. USB is too slow to be used for hard-drives if you plan to actually run anything off the drive, or use it for real-time data like video.
Do you have a firewire port? If you are using an older iMac G3, you might consider an internal drive ... it would be faster than USB at any rate.
And, yes, there are USB hard-drives out there, though I wouldn't recommend them for the reasons stated above.