1 TB is four times the storage space of 256 GB. An SSD has much better performance than a 5400 RPM HDD (what most PCs have), and slightly better performance than a 7200 RPM HDD. The iMac's HDD is 7200 RPM.
Graphics hardware is the absolute most important consideration for playing with games. RAM and processor play a part, but for any all-in-one or notebook, you can upgrade RAM, but you can't upgrade processor or graphics. Pay for the top graphics and processor when you order it. With 16 GB of RAM, you won't have to worry about upgrading in two years, when all these ex-spurts start crying that the new games need more RAM. I never heard anyone say about a two year old computer "I have way too much RAM."
Summary: It's a great setup.
As to these other Ex-Spurts...
"i7 + 16GB of RAM is probably overkill."
Well, it seems this guy thinks you need a Goldilocks computer: i3 is too weak, i7 is over-kill. Anyone with the brains of an artichoke knows you cannot have too much processor, too much RAM, or too much HDD space.
"you will be paying for the apple logo"
Wrong. You will be paying for...
-- Firewire 800 for faster copying of files to an external HDD, and for target disk mode.
-- Thunderbolt for even faster copying to an ext. HDD (20 times faster than USB 3.0) and for target display mode.
-- Aluminum uni-body case for durability.
-- top-quality LED display-- if you can't see every well, this is definitely something you won't appreciate.
-- EFI firmware (no BIOS) for faster startup and more reliable hardware to software interface.
Most young game players are not really computer techs, so they don't understand any of these features, and consider them to be worthless.
"Half of that probably won't fit"
What does this mean? How can a processor or video chip set not fit? Apple sells it like this every day. Do you think there are tens of thousands of folks out there with brand new iMacs that don't fit?
"most games don't run on mac"
This person doesn't need to be even trying to answer any computer questions. All games run fine on all Macs as long as they have the graphics for it. He must have been living under a rock since 2006 and doesn't know that Macs run Windows.
"get a good powersupply"
That will be automatic. The iMac has the correct power supply for all of this.
"There's nothing a Mac can do that a PC cannot do"
Wrong. A Mac can run all operating systems reliably and without any strange hack for installation. A Mac can boot to a GUID Partition Table HDD scheme (more advanced than Master Boot Record). A Mac can reset VRAM with key combo at startup. A Mac can copy files at lightening speed (much faster than a PC) to an external Thunderbolt HDD... although Asus is beginning to add this idea to their newest computers.
and the same ex-spurt: "i5 is the seat spot" Another guy who thinks you will have too much power. In two years, you will wish you had more than the i5 power, so go ahead and get it now.
You are doing everything right, but just because these semi-nerds cannot understand more than GHz and i5, they think you will die from buying a computer that is faster both in playing the games and in file copying ability than theirs, and has some hardware features they cannot even spell correctly, much less know what it is.
EDIT: (Yahoo Answers does not allow "chat" so I will only add this)...
The connection method for a drive determines most of the speed in copying a file. For copying a 1 GB movie file to a USB 2.0 HDD, you find the time will be from 45 seconds to one minute, give or take. For the same by Firewire 800, it might be 10-15 seconds. For Thunderbolt connection, it might be 5 seconds. Thunderbolt is brand new technology developed by Intel, and it will be a standard for high-quality computers, such as Apple (already) and Asus (just beginning to use it). USB always disappoints in real-life performance tests. It's much more disappointing than those Mile Per Gallon figures advertised for cars. My old Mac with Firewire 400 is much faster copying files to an external drive (2-3 times) as my newer PC using USB 2.0 even though the official specs show USB to be faster. It just doesn't perform as it is advertised due to Firewire having much higher bandwidth. Firewire was developed for video rendering and transfer, since USB can drop frames and professional film editors can't have that sort of performance glitch, much less the slow speed. I don't kbnow why I have to sell you on sticking with your choice, except all these PC geeks are like little devils on your shoulder whispering "Apple makes junk" into your ear. They haven't even spent an hour using a Mac, so what do they know. Might as well be badmouthing BMWs having never driven one. "They have exactly the same specs as Chevy-- four wheels! Don't pay for that logo!"