Yes, it does. I've got a 20" iMac with the glass front, and it reflects everything like a mirror. It's at the end of my bed, so when I read books at night with the light, I have to tilt the screen away so it doesnt reflect in my face. Can be a bit off-putting but the picture is definately better imo.
One question - does the glossy screen give off a lot of glare? I see the screen is facing away from the window, so does that help?
I own a 17" iMac as well, and I can say without a doubt that the 20" is far superior than the 17" (Screen-wise at least!)