External Display Tips For Your 27-inch Display, From Apple

"In case you're itching to use that new 27" iMac as a big display for a MacBook, DVD player, or some other device -- and assuming your new unit isn't one of the ones that has shown up DOA or with a cracked screen corner -- Apple has released a knowledge base article gives you the scoop on how to do it all."

This is a pretty easy process, as outlined in the knowledge base article, so give it a read if you are thinking about it. Glad they added this feature, long overdue.