Typically you get two kinds of folks responding to "should I buy this _______ used Mac?"
* Folks who say "Never buy used"
* Folks who say "Never buy Mac"
Next, you decide if these are folks who really have a brain or just prejudiced. I have bought about a dozen used Macs before, and none of them was a disappointment. Sure, some were very cheap and not as powerful as I would like, but I didn't spend US$1,000 either.
If you want to improve on a 30 month-old MacBook, don't buy a four year-old iMac. If you are determined to have a "desktop" system and don't want to spend over US500, that iMac 2006 Core Duo is a good deal. You probably won't find a second-hand Intel iMac for less. Read the disclaimer carefully: they consider 8 dead / stuck pixels acceptable. If you don't want to take a chance on dead pixels (yes, they can happen), see it before you buy it. As far as the difference between a 2005 model G5 and a 2006 model Core 2 Duo, the main things are the options for installing Windows and OS 10.6. I have a MacBook running 10.6 and a G4 running 10.5 and I spend 99% of my time on the G4.
You could also buy a refurbished Mac Mini (link below) and scrounge up a decent display, keyboard, and mouse. It comes direct from Apple, has a one year warranty, all restore DVDs included, and free shipping. Of course, it costs US$430-700, and for a thousand dollars less, you could have a Dell... NOT!