First Mac Purchase - iMac i3 - Please Advise

Hello, I am very close to purchasing my first ever Mac, but I am unsure of which direction to take. I am debating between the iMac i3 - 21.5 inch base model with 8gb of ram, or the next model up. I know that the hard drive is double, the processor is a little bit faster, and the video card is better. I am hoping there are some Mac gurus who might help with some insight is this decision. I will be mainly using it for work, but also for some light gaming, nothing serious. Is the $250 worth the 3.20 i3, 1TB HD, and the better graphics card? Or, should I increase the ram on the base model from 4gb to 8gb? Any suggestions on above mentioned information or any other relevant information would be much appreciated, thanks.

Thank you all for your quick responses. As far as the first respons goes, I just do not know enough yet about the OSx applications, so I am really not sure yet what applications I may be using. However, I do edit/add new products to the web for the company I work for. It's primary used will be for work, but the web editing I do is nothing too crazy. Mainly just editing photos and writing the info in HTML.
In reference to the second response, that was the way I was leaning. I am unsure if I can convince my wife to go up to the i5 model though, ha. I do want to check out some games on I though, even though I have a ps3. I also may want to run Windows with the parallel program. I guess I'm just trying to make the most informed decision since I do not know a lot about the macs and which one is the best value.
The third response has almost convinced me now to go with the base model. The bottom line for me is $250 is not a huge deal, but $450(to go to the i5) is getting closer to being a big deal. To me, it seems like the faster processor and the graphics card are worth $250 and the hard drive is a bonus as well. I definitely liked the point of getting an external drive, but how much am I going to spend for a 500gb external drive? Will I be getting closer and closer to the original $250 difference I could have spent to go with the nicer model? Once again thank you for responding, and I hope to hear some more insightful thoughts to help me with my first Mac purchase, cheers.

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