The iMac's hard drive is rather difficult to get to. You can replace it but will have to get through the front panel, which is not a simple task. Additionally, on at least some systems (I believe the iMac is one of them) Apple uses a special hard drive firmware, without which the system fans will blare at full blast.
I'd recommend you get a large external drive (and perhaps consider a multi-disk array like a Drobo or Pegasus, among many others) that can give you expandable storage options. Alternatively, using multiple external drives is another option.