First time iMac buyer: most basic or most expensive model?

Thinking of getting an iMac to replace my 6 years old PC. I hope the Apple will make my CS3 processing a bit faster and to avoid those occassional spam/virus/spyware hassle.

As a PC user who used to spend just a few hundred dollars on a computer, I am not yet comfortable shelling out $1000-$2000 on a computer.

I want to ask whether I am better off biting the bullet and get a full feature, future proof model (27" + i7 + 8Gb, $2,400) or I can be done away with the most basic model (21.5", $1,200). The basic model seems to be a better deal if it can satisfy my needs.

(My usage: I am not a professional photog. I mostly shoot JPG with my Canon 5D2. Normally just do color balancing, sharpening, layers with some HDR and panorama stitching. I also use the computer for internet and word/spreadsheet. And oh, while I'm not a gamer, I will definitely get Starcraft2 next year).