Be warned that after you removed the adhesive tape (which is what it is) you won't be able to close the iMac properly unless you replace it. I had the display involuntarily come off once and was lucky to catch it. I recommend to wait until the iFixits of the world provide a replacement. Unfortunately I can not identify the sticky tape type. Despite what I read elsewhere, the internal disk may not be 2.5". My iMac (1G disk) came with a 3.5" Seagate Barracuda. You thus may require a 2.5" -> 3.5" adapter. Initially I replaced the internal HDD with an SSD and planned to install OS X from an USB stick. However I could not get the iMac to boot from an external USB disk or SD card which I have prepared using my MacBook. I think there may be something special about the iMac that defies booting from "non iMac" media. I know this sounds strange.
Network Recovery also failed with an error -2003F so I got utterly stuck. Here is how I resolved this:
I mounted the original internal disk back in the iMac and attached the SSD using the Seagate Thunderbolt adapter and the HDD using an USB3 adapter.
I then booted into recovery mode and first installed OSX on the SSD only so that I have proper recovery partition. I then mounted the SSD in the iMac and validated that it would in fact boot. Next, I put the original internal disk back, booted recovery mode once more and created the Fusion Drive on the SSD/external HD as per Jollyjinx' description and installed OS X. Works :-). Last step was to mount the SSD in the iMac. My current setup looks like this: