Does my emac support 'core image' ...?

Answering #2 first, here's what Apple says (scroll down a couple of subheads):

http://docs.info.apple.com/article.html?path=Mac/10.4/en/wn09.html

and this article:

http://docs.info.apple.com/article.html?artnum=301347

shows the system requirements and how to tell if you video card supports it. That should answer the first part.

Only the 1.42Ghz emac with the 9600 radeon supports 'core image' which is what causes the 'ripple effect' when dragging items from the dashboard, also the translucent menu bar is a core image effect.

1. Correct

2. You're running Tiger right now, and parts of it require CG such as a the ripple effect with moving widgets. If you don't have CG support, you don't see the effect, yet Tiger still works and does not eat your computer components.

If some third-party app must have CG or not work at all (I'm not currently aware of any), you'd have to get a newer computer as the graphics unit in you eMac is not upgradeable.

actually i was eyeing up the new ilife 08

Should probably ask in the iLife forums, They should be pretty helpful.

Here: http://discussions.apple.com/category.jspa?categoryID=141

You won't be able to use iMovie '08 at all as it is unsupported by the G4 processor found in your eMac.

Good Luck!