Well, it is. I'm sorry if I might sound harsh here - but the following comment is rather my frustration with Apple than directed against you, Veljo... In the PC world, you buy a tower and a nice display to go with it. If the processor's too old, you replace it. If the motherboard's becoming old, you simply replace it (and some other stuff, of course). All of that can be achieved without expensive "upgrade cards" - you simply buy the parts. We now come closer to this with the Mac mini, though. You can buy a nice 20" Cinema Display and a good keyboard and mouse and just replace the mini, say, every other year. You sure still get a little money by selling the old one - or can keep it for a different task.
But let's be honest: I don't know when you bought your iMac, but from the specs I'd say it's a 2002 or 2003 model. It's two years old, maybe three. That's not exactly a new computer - and _some_ stuff simply needs a fast processor, other stuff needs a good graphics card. The iMac, while a VERY decent all-in-one computer, comes with the burden of, well, being an all-in-one computer. I'm sure its display would still do the job for yet another 2-3 years, but its CPU - among other things - _pales_ even against the Mac mini 1.25. If you try and sell it, nobody will really pay a premium for the nice screen nowadays: It's simply an old computer already.
But: It's not as if you couldn't still use it. It does all it ever did still as good as new (I hope). You _can_ get Tiger for it and install it, and although it might not do 4-way video chat or display a nice ripple effect when adding a Dashboard widget, that's not the _main_ things Tiger is about. You'll still get Spotlight, you'll get an overall faster machine, you _will_ get Dashboard and its widgets and a lot of little things like the beautiful and useful Dictionary. And about 195 things more.
So, well: You've GOT an old computer. Don't expect it to run the fanciest new graphics card tricks, don't expect it to run the newest 3D-games at the FPS a dual processor G5 is getting. DO expect it to perform the tasks you've been using the computer for BETTER with the new operating system. If it wouldn't, I'd say Apple did a bad job. But they've done a good one, actually.