After some careful consideration, I've decided that paying out £13.99 for a Mountain Lion upgrade to my 2007 iMac was better than upgrading the hardware as I have more pressing matters of family life where money is best spent. Besides, if a full re-install of OS X and Mountain Lion (hopefully) being the tonic to Lion that Snow Leopard was to Leopard, then I was hoping to get at least another year from the ageing beast. I can say that after doing the Mountain Lion upgrade, my iMac is now running smoother than ever. It feels like its working with the snappiness of Snow Leopard all over again, although with some new features/additions. Let's see how that notification area works out, and I'm a bit bemused that (probably due to my lack of knowledge from not tinkering too much yet) that I cannot turn off the dashboard. I've never and probably will never use it.
All in all, I'm happy at the snappiness that Mountain Lion has given my iMac, which should see it through to the next OS X update due out next year. No doubt my iMac will be on the chopping block for supported systems however. I've now got the (some would say) horrible task of moving files back across from backup, but I see it as an opportunity to de-clutter and organise at the same time.