The "2nd Generation fanless iMac" refers to the 350 and the 400 DV models. All earlier units have fans. You were probably thinking of motherboard revisions:
233 (Bondi Blue) = Rev A (Rage IIc Graphics, 1st gen)
233 (Bondi Blue) = Rev B (Rage Pro Graphics, 1st gen)
266 (5 - Colors) = Rev C (Rage Pro Graphics, 1st gen)
333 (5 - Colors) = Rev D (Rage Pro Graphics, 1st gen)
350 (Blueberry) = Rev E? (Rage 128 Graphics, 2nd gen - fanless)
400 DV (Colors/SE) also 2nd generation, Rage 128 Graphics, & fanless.
The 7200-in-iMac question has come up in these fora before, and many people have installed them without any trouble. That 4 Gig drive is overdue for a size increase, and the 7200 should give some speed boost too. Enjoy.
[edited: corrected mistakes. Was correcting them last night when the Forums quit responding]
[This message has been edited by reader50 (edited 07-14-2000).]