It's called "lag" or "latency". Your machine is probably about as minimal as Cubase can support for more than a couple of tracks of audio. If you're recording using the analog input, there's a delay involved in digitizing that sound.
You might consider investing in a USB
audio interface which would probably speed up the analog-to-digital conversion and possibly lower your latency. A dedicated 7200RPM FireWire hard drive for your audio files would also help, as would more than 256 MB of RAM.
The older iMacs are great general-purpose machines, but don't really excel at pumping a lot of data through the RAM, hard drive, etc.