Yes, this should work with your 20-inch Early 2008 iMac. This generation uses 800Mhz PC2-6400 DDR2 SO-DIMMs. You might consider upgrading to 6GB in order to max it out, using a 4GB DIMM and a 2GB DIMM. The Apple official maximum memory is 4GB however the tested maximum is actually 6GB.
[http://eshop.macsales.com/shop/memory/iMac/Intel_Core_2_Duo_PC2-6400|One of the various companies showing 6GB maximum]
Hope that helps you!