I completely understand your issues of not being able to afford a new or refurb Mac.
I couldn't afford a new Mac ,spec'd out as I needed myself, a couple of years ago, and bought used from a reputable Mac reseller and got two iMacs for a little more than the price for just one.
AND, just for the record, the refurb store section of the Apple website doesn't offer THAT big a discount. Maybe 15% or so, at the most, on Macs (I have seen seen 20% on Apple iDevices, though, that's pretty good).
I kinda disagree with what everyone is saying about what your friend wanting $500 for that iMac being too high.
All the regular users here know that Macs keep their value much longer than PCs.
My best friend just sold his 2008, 24 inch screen iMac on eBay for over $800! in pristine condition with a brand new install hard drive that he did , himself.
But anyhow...
My colleagues are right about the 2007/2008 iMac models not being powerful enough and not being able to hold enough RAM to be able to run newer versions of OS X well.
They are 7-8 year old Macs that you'll only find yourself struggling with if you decide to run the newer OS X versions and much newer software.
However, if your goal is still to find a relatively cheap, but good condition used Mac, I would stick to looking at later late 2009 models and newer as these Mac models can, usually, take a minimum of 16 GBs of RAM and many up to 32 GBs. Also, look to those later Mac models with i5 and i7 Intel CPUs.
Forget about the lower i3 dual core (core2duo) Intel CPU Mac models.
For doing video work, a minimum of an i5 CPU will be much better and you still have the needed graphics power for doing regular graphics work.
If you can, try and buy a used Mac from a local, but reputable computer/Mac reseller or from a reputable online Mac reseller.
Their prices maybe higher for used models, but a reputable reseller will look over their used Macs, and some offer better warranties on their used Apple products and computers than just 30 days from the time of sale.
IF, you must look to eBay, caveat emptor (buyer beware).
Make sure the seller has a good reputation for selling legitimate and good quality used electronic/computer items and spend some time and communicate with that eBay seller about the Mac that he/she is selling on eBay.
Get all of the info and facts that you can about a Mac selling on eBay.
There are just too many scam artists on eBay selling illegal, defective or problematic Macs of Apple devices online.
Good Luck to you!i