I'm curious about this to, since the GPU is a swappable card it should theoretically work, getting a 4850 will be the only problem or iFixit will make it possible ;) Love to see someone trying this!
With the processor upgrade and this one, you can make a though iMac that almost is equal to the i5/i7 model!
For the CPU upgrade, see [http://www.ifixit.com/Answers/View/7814/I+am+thinking+of+upgrading+the+current+Core+2+Duo+3.33GHz+to+Quadcore#answer13420|this thread], here we talk about upgrading from a dual-core to a quad-core.