According to the Apple site, the Video connection to which you are referring (I think) is a Mini-VGA output port. I don't know why, but it requires a VGA display adapter.
It provides support for video mirroring: external devices display an image identical to that shown on the built-in display with output resolutions of: 640 by 480 pixels at 60 Hz, 800 by 600 pixels at 75Hz, and 1024 by 768 pixels at 75Hz.
It's too bad that you can't add another video card that could support other larger monitors. If so, I would buy an iMac TODAY, but since I do graphic work, the 15" is not big enough. I know it's more like a 17" CRT, but even my Cinema Display isn't big enough. I have a 17" secondary monitor beside it.