Ok, just my opinions, but they're based on what I've seen in a LARGE publishing company that I am contracting at...
For image editing and web content, the G4 iMac is probably powerful enough to do the job. For video editing I would go with more horsepower. Most of our designers who do web and magazine design work are using G4 Dual 1.25ghz machines. The new machines we are getting in to start replacing older machines are G5 1.6ghz machines. They perform as well as the DP 1.25ghz machines.
For what you are wanting to do, I would still really recommend the G5. Video editing takes horsepower and the G5 has that to spare. Especially if you're looking at the Dualie
As to how long the machines would be usuable, in the business world a computer is usually given a 3 year lifespan. At that point, while not unusable, the new machines that have come out are such a large degree more powerful than the previous models that upgrading is prudent.
Given that the G4 iMac is already one generation older than the G5's, if it were being used in a business enviroment I would say that it would be replaced in 2 years rather than three.
So, if I were you, what would I buy? I'd probably go ahead and get the Dual 1.8mhz machine, or maybe even see if I could squeeze out an extra $500 and get the Dual 2ghz machine. It's going to give the longest possible life cycle. For a monitor I'd get a good 21" Flat CRT. Maybe a Sony, although even a Viewsonic would work adequately. Spend the extra $100 and get a flat screen, though. The curved front on most large monitors is annoying to look at for a long time.
By the way, just so you don't think older Macs are totally unusable. The iMac 333mhxz I use at home is still quite the peppy little machine, and runs OS X nicely. (well, it would if I could figure out the damned mouse driver issue.)
Finally, don't take everything I say as gospel. I'm giving you the benefit of my experiance supporting users doing the kind of work you're wanting to do. Other people may have a different, and valid, perspective.
Jerod