Hi,
Sorry for the delay. I'm in Afghanistan so my internet connectivity is sometimes limited.
It looks like your initial question is answered. I have an older iMac and I've upgraded it to Lion with no real problems. It didn't make it slower, at least not noticeably, and if I recall correctly, I also picked up a gig of diskspace back. It has a smaller footprint. However, I noticed the last update is a gig, so you'll be right back when you update. With my limited bandwidth, 1 gig would take weeks to download so I'm not going to be installing it anytime soon.
For your fans, mine kick on when I'm doing heavy processing, like rendering HD videos in iMovie. Before you reset the SMC, have you tried eliminating an application as the cause? For example, I occasionally run Twonky media server on my MBP and it'll make the fans come on. I'd first go through my startup and remove everything, and then add them one by one until I figure out what application is causing them to kick on.