I agree with g/re/p (although perhaps worded a little differently)!
That machine probably will not be extremely useful for anything but nostalgic purposes. I keep a few 5- and 10-year old computers around, but I'm a huge computer-nostalgia buff, and I wouldn't try to have someone who was less experienced with computers use them for any day-to-day stuff. They're strictly for memories, in the corner of my min... er, I digress.
What you've got on your hands is a great nostalgic computer. It's time to weigh in, like g/re/p said, and see what the cost of upgrading the computer would be vs. simply purchasing a new/used computer. For $500, you can get into the action of Snow Leopard on a Mac mini and have a computer that will last you 5 years or more. Or, for half that, you could spend your time upgrading the G3 iMac that will never be faster, is already past its prime, and can only run OS X from three generations ago.
My opinion is to sell that computer for $50 or $100, save for the next few months, and surprise your son with a $500 Mac mini for the holidays. Of course, you know your financial situation much better than I do. If that's not a possibility, we can suggest upgrades for the iMac that will, at the very least, get you up and operational (if not severely dated).