Don't compare PIII to G3. Don't compare Windows 2000 to Mac OS X. The speeds you're going to get are gonna vary. File handling will be faster on OS X and the iMac, some applications might be faster on the PIII. RAM is important. You won't really need a G4 right now, but it'd be better. The PowerMacintosh G4 is also more expandable.
Any Mac with a G3 processor and a clock speed of around 500 MHz with 256 MB of RAM should run VERY well. Of course, it's better to have later hardware, because of all the other improvements like bus speed and such. However, as was mentioned above, more RAM helps a LOT. And I really mean a LOT. You can get RAM cheap today... one of the best places is www.boundlesstech.com -- good quality, good customer service, good prices.
I'm running OS X on an 600 MHz combo drive iBook, and the interface in OS X is actually noticably faster than on my G4 cube 450 MHz, but I think that's probably because I need to erase my hard drive and do a COMPLETE reinstall on my cube. Nevertheless, people have said that OS X runs decently even on a Rev. A iMac, so your 700 MHz iMac will be MORE than sufficient for OS X.
"C is for cookie anyone" anyway, I have X.1 running on a rev a iMac with 512 meg of RAM and on my 233 laptop with 160. More Ram helps, max it out if you can. I'd recomend a rev a with 512 over a 500MHz iMac with 128, RAM is that important.
oh, and don't expect to do crap with openGL if you are on an iMac. productivity? fine. Quake? or even nanosaur? crap.