Looks like it shouldn't be a problem, providing you're running 10.2 or up.
From LEM (http://lowendmac.com/macdan/05/1024.html):
Big drives are supported under OS X 10.2 and later in iMac G4s, eMacs, 2001
Quicksilver G4s,* 2002 Quicksilvers, and all later desktop Macs. All Titanium
PowerBook G4
Hello everyone, I recently randomly found a 250GB IDE drive in my basement,
and it works. I wanna know if i can put it in my iMac G4 without that 128GB
limit. If i partition it with x2 125GB partitions, will it work? Also, I
can't do that because I have no macs that are capable of using an HDD
