Thunderbolt Display vs iMac

I currently own a 13" MacBook Air, and I'm feeling the need for some more screen real estate. Here's my question: Do I go for the $999 Thunderbolt Display, or spring a little more for the entry level 21" iMac? I know the obvious difference is the screen size between the two, but does the extra storage/processing power of the iMac outweigh that? Which would be the wiser choice?

PS - I plan on waiting till they are refreshed before I purchase, regardless of which I choose.