I think it will work, yes. One slight caveat however, I've considered ordering drives like this from Amazon or other on-line places, and if you read some of the reviews at the bottom you'll find comments suggesting these are not necessarily new drives, rather older drives that have been formatted. This isn't always the case, but I'm wondering if you have an independent computer shop or place near you that has them?
For example, I found some second-hand 80Gb hard drives for £10, and was able to fit them into iMacs and PowerMacs easily enough.
There's one further option; you could buy an external Firewire Hard Drive (assuming your iMac has Firewire ports) and work from hard drive with no upper space limit and read/write speeds that are faster than USB2. It would save you the hassle of disassembling sections of the iMac and you'd be able to quickly access all your data by plugging it into another machine!
[Edit] So yes, try ordering the Hard Drive from Amazon. If it doesn't work you haven't lost too much money, but I really would be inclined to go the Firewire external Hard Drive route. I just looked at your profile and it shows you have more recent Macs, like the Macbook Air. With an external Firewire hard drive you could easily transfer massive amounts of data to and from your machines (you may need an adaptor if your Macbook Air doesn't have a Firewire port), but that kind of crossover ability is incredibly cool I think.