Can a imac g4 run os 7.6.1??
The original iMac I think shipped with 8.1(or some variation thereof) so 8.1 does have native support for USB. In addition, I know the B&W G3 shipped with 8.5.5(my first came with the original install and the restore disk) and also shipped with a USB keyboard. The main significance of 8.6 is that it supports USB mass storage devices(flash drives, etc) which aren't supported in earlier OSs although things like USB floppies and LS-120s work. Just in case, though, the B&W DOES have ADB(so does the Yikes! G4, although it only has the solder pads on the board).AFAIK one of the reasons for this is they don't have AKB ports and only OS 8.6 has support for USB at boot.
I do run 8.6 on some lower spec systems like early trayload iMacs, as I find that the smaller resource footprint makes them a lot more responsive while still retaining support for Classilla and flash drives. I DO run 8.6 on a lot of OWR low spec systems-I need to downgrade my 6500.8.1 from Apple's special install CD that shipped with the iMac 233 Rev A has support for USB.
8.5 on the Blue-And-White G3, same story.
USB in 8.6 is said to work much better, but I haven't personally tried it out, as on machines where I wanted to use USB a whole lot, I went all the way up to 9.x.
G4 upgrades do work in PCI Power Macs (7000/8000/9000) with 7.5 and 7.6 on them. I don't know if most need extensions to work properly or not. I believe G3 upgrades in the PCI Performas (5000/6000 series) do need an extension to work.