I'm looking at going this route too... I'm actually planning on getting a pair of Dual G5s so I can have a full data and hardware backup. Even with a decent (non-Apple) monitor and a KVM it will come in cheaper than a new low-end iMac.

Right now a G5 tower is about 10% - 15% of the cost of a equivalent(1) Mac Pro and the only way I can see it compromising my productivity level is that I'll have a lot more money left to spend on beer ;-)

(1) I mean relatively equivalent, ie: low-spec G5 to low-spec intel...