That Dell's GeForce 6800 will kick the pants off the iMac's X1600 Pro. The processors are probably pretty equal... the Pentium D has a much higher clock speed, but it's not as powerful per clock. But then, of course, you have the "intangibles" (or maybe they're not so intangible) of the built-in iSight, the wonderful form factor, the included wireless, and OS X.
As for dual booting, I don't see why XP Home would be too bad for it. If you're just running a few programs and games, there shouldn't be much difference. And yes, OEM copies from NewEgg should work since they're not tied to a particular machine.
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