Unless your iMac is thoroughly filled with dust bunnies, you shouldn't have much of a problem with HD content. Anything from the last four years should easily play HD content, and if you iMac has a MiniDisplayPort on the chassis to allow connecting an external display, you'd find that connecting such a monitor/TV would properly display HD content.
It might not play it smoothly, as Squirrel noted, but it shouldn't damage your system either. HD playback takes less GPU than World of Warcraft, which already is CPU bound.
You'll be fine.