After reports of iMac video card related problems hit the media, Apple has come forward to acknowledge the issue and state that they are working on a fix. According to the company, the number of affected units is very small, and no clear timetable on a solution is available.

The consensus is that the iMac video problems are tied to the ATI Radeon HD inside the computers. While reports continue to be highly erratic with regards to how the problem manifests itself, overheating, due to either intensive graphics applications or an extended uptime is present more often than not.
Considering the fact that the v1.1 update for iMacs, in mid-September, made the problems worse for many of the people affected and that it contained bug fixes targeted at video drivers, it is expected that the problem should be solvable through another update and is not necessarily a hardware fault.

An Apple spokesperson told Macwolrd that "a small number of iMac users have made us aware that a recent software update issued by Apple can sometimes cause their iMacs to freeze, requiring them to restart their iMac."
The fact that the number of users affected is small relative to the total number of units sold is not overly important since this particular issue can be rather crippling, rendering the affected machine useless. While the company has given no clear timeline for the fix, such updates have generally been given a high priority. On the other hand, considering that Apple is getting ready to launch Leopard, fixing this issue that only affects 'a small number of iMac users' might not be their highest priority.

For those who need a solution today, some users are reporting that doing a manual rollback of the video drivers to before the 1.1 update solved the problem or at least lessened it.