While its an interesting notion, it sounds like a whole lot of effort for minimal return. Figure that you're going to have to gut the entire display assembly and remove the neck. Then you'll have to gut the base, and remove the neck from the base. Once you've done that, you'll have to gut the neck.
Now figure that you need to work out how to get a mac mini wedged in there correctly, with none of the mac mini's ports lining up with the iMac's bottom pan. The optical drive wont be in the right place, and since its a slot loading drive, it wont kick out the optical drive door on the imac housing. With the display, you've got to procure another vendor's display, and gut it. then you've got to get it to fit in place, and run the video and the power cabling down through the neck, and into the base. Once thats done, you've got to hook the display into the Mac Mini's DVI port, and figure out how you're going to run your power.
The long and short of it is, the new display may not fit in the display pan without some serious modification and gluing, the cables unless you remove their protective shroudings may not fit in the neck, and in order to get it all to fit in the bottom of the machine, you're most likely going to have to rout out the back of the unit's base.
Given all that, while I think its a great idea and it would be cool. However, if faced with all of this, just for aesthetics of an iMac G4, or a new screen and mac mini, I'd shelve the idea and stick with the mac mini
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