That's what I've done. There's a mic located right next to the camera on the iMac, so that's just what I've always used. AFAIK, it's the default mic. Always worked fine for me, though I suppose if you have a particularly noisy environment you may want something else.
Most people will use the headphone connection when using Skype, but can the headphone connection be done away with by using the microphone input and the built in speakers? If 'yes' then what is the best mic to use. Is there a specific mic for the iMac.