IMac or Mac Pro

I have asked this question before and I'll be honest - I was sorta confused with some of the responses so I am back with what I hope are better thought out questions. I am torn between the iMac 3.06 and the Mac Pro 2.66 4-core.
I am not a pro but think of myself as a prosumer. I do a lot of Photoshop stuff, editing in iMovie and Final Cut Express - shoot a lot of stills and HD Video. NEVER DO GAME STUFF.....
Here is my dilemma...
On the Apple store site I created 3 machines with 8GB of Ram, AppleCare, Wireless Mouse, 1TB Hard Drive.
(iMac 3.06 - Mac Pro quad 2.66 - Mac Pro 2.66 8-core)
The iMac comes in at $3,388 with the extra 4GB of Ram. What is with $1,000 for an extra 4GB of Ram. Why so much higher than Mac Pro Ram????? Do I really need 8GB????
The Mac Pro 2.66 Quad comes in at $4,067 with the extra 2GB of Ram (seemed too reasonable not to add more Ram) and the 24" Monitor. Is this worth the $679 more since neither one can have more than 8GB of Ram?????
The Mac Pro 2.66 8-core comes in at a whoping $6,097 with the extra 2GB of Ram and the 24" Monitor. This kinda makes the choice between the 1st 2 since the difference of $2,709 appears a bit rediculous between the iMac and the 8-core Pro......WHY THIS MUCH MONEY?? ARE THESE REALLY COMPETITIVE WITH THE DELL ETC??? DO OTHERS EVEN BUILD A MACHINE AT THIS PRICE?
I know this is long and with a few concerns - thank you for indulging.
Thanking you in advance for any input I receive.
Wally

First of all, don't buy apple RAM. It is extremely overpriced. DO, however, keep the RAM that apple gives you. They won't service your Mac if it has 3rd-party RAM. If you need to have your mac serviced, remove the 3rd-party RAM until they're done servicing it. I would stick with the iMac though, You get more space (no tower). You have the screen built into the price as well. The applications you use don't even recognize the 8-cores of the Mac Pro. Adobe CS4 doesn't take advantage of the better GPU in the Mac Pro either. If you have A LOT of accessories that you connect to your Mac, you might want to consider the cheaper Mac Pro. USB hubs are a pain and they stop working if you use too many. Also, the Mac Pro has MANY FireWire ports, all backwards compatible. The Mac Pro is also more expandable. Overall, I would make it a choice between the 1st Mac Pro and the iMac. Media work will also render faster on the Mac Pro, so the better graphics isn't totally a waste. Also, with Snow Leopard coming up, multiple cores will be utilized more. If you have the money, I would go with the cheaper Mac Pro. If you are buying speakers, I would personally recommend the Bose Companion 2 speakers. They're only $99 so they're not much of a hole in your pocket.

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