You are missing the (. I've added it in red so you can see what I'm trying to explain.
Code:
<?php if( is_front_page() ) { ?>
<ul>
<?php query_posts('category_name=testimonials&showposts=1&offset=0&orderby=rand'); ?>
<?php if (have_posts()) : while (have_posts()) : the_post(); ?>
<li>
<a href="<?php the_permalink(); ?>"><?php the_title(); ?></a>
</li>
<?php endwhile; endif; ?>
</ul>
<?php } ?>