Can memory be added to a 20-inch Early 2008 IMac?

Yes, assuming it doesn't already have the maximum amount.

Go to Crucial and download the little app that examines your system and recommends RAM upgrade options.

Their prices are good but don't have to buy it from them - determine what you need and buy it from Crucial or OWC / MacSales.

You can install at least 6 GB on your 2008 iMac, perhaps more. Check the Crucial website and download that app.

It's an easy do it yourself project. Apple even provides the instructions (*)

http://support.apple.com/kb/HT1423

So do Crucial and OWC. All you need is a screwdriver.

(*) Apple's specifications say 4 GB is the maximum. The reason is that was all there was available for them to test in 2008. If Crucial or OWC say you can install more then you can install more.

6 GB OWC memory for your iMac: http://eshop.macsales.com/item/Other%20World%20Computing/6400DDR2S6GP/