1. I don't think this matters in your case (it's PC133 speed, though).
2. Adding RAM to the user-accessible slot asks for PC133 SO DIMM (for the original iMac G4, at least...I don't think this has changed, though). You can find good deals at
http://www.dealram.com/ just click "Systems" at the top and select "iMac G4 PC133"
3.
Apple Support is your friend!
NOTE: This is for the original 15" and 17" (not 1GHz 17"), if you're installing for a new 17", I think things are a little different (RAM Type, etc)
Anyways, adding RAM will really speed up your system! Go for the 512MB upgrade

Hope this helps!