Hi!. I am in the same boat as you, with a Blue slot-load 500 MHz DV+ iMac for my daughter, that I have rescued from a local school system dumpster (!!!!) I have done some research, which I am happy to share with you. There is an Apple Knowledge Base article #58007, which lists memory specs and upgrade limits for each iMac model. For the DV+, we can install a 512 MB DIMM in each of the two RAM slots, which are easily accessible via the door at the bottom of the iMac. Adding RAM is the most effective way we can extend the usefulness of our older iMacs.
Take a quick look at what you need and where it will go. You can do this much right away, just so you can become familiar visually with what you are going to buy, and where it will go. Turn your iMac upside down on a towel, open the door with a coin or screwdriver and the memory is right there, plugged into two sockets called banks. Do not touch anything without proper anti-static protection. Apple gives instruction here too in article #43012.
There is a lot of PC100 memory available on the internet, especially through eBay, and the semi-permanent eBay Stores. I like to be sure about the quality of my memory chips, however, and the memory for this model is not particularly expensive at all, so I chose to buy new modules from Kingston (www.kingston.com), pretty much IMHO the gold standard in the memory biz. They sell a 512 MB module for $109.00 (Kingston part # KTA-IMAC100/512). I bought one of these modules first, to be sure I had a reliable 512 MB of RAM (+ the RAM already installed in the other bank). Right away I could run anything in Panther, including the new iTunes Store with its video clips.
Later, you can shop for other brands of memory, new or used, for a lot less $ to install in the other bank (replacing the other 64 or128 MB), and then with 1 GB RAM you can really go to town with iMovie editing and Photoshop, etc. Remember to get only PC100 168-pin DIMMs that are specifically meant for Apple Macs.
I still haven't found out whether there is a way to increase the video resolution, which is due to a paltry 8 MB of VRAM. Web pages often have to be scrolled to be fully viewed. I will post that as a separate topic this morning, if you want to watch for answers on that, too! Good luck!