Yes, depending on what your plans are for it. It's one of the very earliest Intel iMac models, so it has limited upgradability.
You can upgrade RAM from the 1 GB installed to 2 GBs. This requires replacing the two installed modules with two 1 GB modules:
|Maximum Memory||2.0 GB|
|Memory Slots||2 - 200-pin PC2-5300 (667MHz) DDR2 SO-DIMM|
You can upgrade the OS as far as Lion, but I would recommend going just to Snow Leopard. It will be better with that older hardware, plus you will be able to run older PPC-only software:
Upgrading to Snow Leopard
You can purchase Snow Leopard through the Apple Store: Mac OS X 10.6 Snow Leopard - Apple Store (U.S.). The price is $19.99 plus tax. You will be sent physical media by mail after placing your order.
After you install Snow Leopard you will have to download and install the Mac OS X 10.6.8 Update Combo v1.1 to update Snow Leopard to 10.6.8 and give you access to the App Store. Access to the App Store enables you to download Mountain Lion if your computer meets the requirements.
Snow Leopard General Requirements
1. Mac computer with an Intel processor
2. 1GB of memory
3. 5GB of available disk space
4. DVD drive for installation
5. Some features require a compatible Internet service provider;
fees may apply.
6. Some features require Apple’s iCloud services; fees and