They'd run fine with it on too!
I have 75 of those imacs here running OS 9.2.2, all with VM on, set at the CORRECT setting (1mb more than the physical ram installled), which is what Apple set it to by default, but hey what do they know about it...
Windows XP SP2 is alot more advanced than OS9! I have no preference between XP SP2 and OS 10.3 or higher, they both work very well, but i'd rather spend £400 on a new computer than spend £200 on an OS X CD and an external CD writer, you can polish a turd all you want, but it will still be a turd at the end of the day