davrouk,
As macbike says this should be fine. Any DDR memory (not DDR2) should slow down to the PC2100 speed however the tolerances in cheap RAM may prevent this from happening correctly. Therefore for an easy life and to avoid potential Kernel Panics, re-stocking feed and unnecessary shipping I recommend you buy from a Mac-friendly supplier and tell them it is for a PC2100 system. They may well send your PC2700 but at least then they are assuring you that that RAM is suitable for downspeeding correctly.
I usually recommend Crucial in the UK (as I'm more than happy with every transaction from them ) however they don't official support the factory slot upgrades for iMac G4 so when I last order from them I just ordered the PC2700 part I knew I needed.
Of course contry to Apple's specs the factory slot maximum is 1Gb so you should go for this size.
regards
mrtotes