iMacs with slot-loading optical drives and processors that are 400 mHz or faster can be upgraded to Mac OS version of 10.4.11.
Those same models all support up to 1GB RAM (two x 512MB modules).
The hard drive can be upgraded but there are a couple of issues:
1) First, the hardware in those iMacs cannot recognize more than 128GB of hard drive space, and are PATE/IDE, which are getting harder to find. If you find and install a PATA drive that is larger that 120GB, you will need to partition so it has a first partition of 120-125GB, and leave the rest as blank, or "unformatted."
2) Second, there are reports (and it happened to me) of the "no fans" convection cooling system in that model not keeping up with the heat production of a newer, larger hard drive and, in our case, extra processor load from OSX. That overheated the PAV board and casued it to now only work sporadically
It does not open usbmodems
If you mean a USB dial-up modem, that model has both an ethernet port and a built-in dial-up modem. It's unlikely that both ports failed. If they did, I would not invest in a rehab of any kind
If these USB devices are wireless receveirs, it may be difficult to find the required drivers that will work on an older Mac OS version. What OS is on this iMac?