X.3.9 Panther IMHO, its overheads are less then Tiger and you still get most of the functionality. Just make sure you've taken the RAM up to 1GB.

I'm assuming here that you mean a slot loading iMac, if it's a tray loader then any version of OS X is going to be sluggish at best, plus it doesn't have firewire or USB 2 for the camcorder.