The Late 2006 iMac with ATI X1600 graphics has a defect that causes it to display graphic anomalies (horizontal lines, distorted shapes, scattered pixels) and "freezes" the GUI where the system becomes unresponsive to any mouse click or keyboard input.
This defect usually becomes apparent after the 1 year warranty ends. It starts off as a horizontal line or distorted shape here and there, but over time the graphics glitches become more prevalent, and the system freezes occur more often. Eventually, the symptoms worsen to the point where the iMac becomes completely unusable, as seen in my video.
Apple has continued to deny this as a widespread problem and refuses to accept responsibility by offering a free out-of-warranty repair. Instead, they want me to pay them $1000 to replace the logic board with the faulty graphics chip on it.
To counter their denial, I offer these links:
http://www.petitionspot.com/petitions/imacrecall
http://getsatisfaction.com/apple/topics/2006_imac_graphics_card_crash_freeze
http://discussions.apple.com/thread.jspa?threadID=2442166
http://discussions.apple.com/thread.jspa?threadID=1467276
http://discussions.apple.com/thread.jspa?threadID=2136365
http://discussions.apple.com/thread.jspa?threadID=1926046
http://discussions.apple.com/thread.jspa?threadID=1896356
http://discussions.apple.com/thread.jspa?threadID=1516765
http://discussions.apple.com/thread.jspa?threadID=2389074
http://discussions.apple.com/thread.jspa?threadID=2291457
http://forums.macrumors.com/showthread.php?t=653082
http://forums.macrumors.com/showthread.php?t=453564
http://forums.macrumors.com/showthread.php?t=764137
http://applequalitycomplaints.blogspot.com/2008/09/intel-imac-17-logic-board-failure-at.html
BTW, if you have a Late 2006 MacBook Pro with the ATI X1600, you might see the same graphics issues and system freezes:
http://superuser.com/questions/73518/ati-x1600-driver-problem-on-mac/
http://torley.com/macbook-pro-with-ati-radeon-x1600-distorted-video-glitches
http://reviews.cnet.com/8301-13727_7-10330060-263.html
http://www.johnvlang.com/MacBookPro-ATI-issue.html
http://www.mac-forums.com/forums/apple-notebooks/139259-distorted-graphics-damaged-ati-x1600-distorted-graphics-mysterious-line-pixel.html
http://www.sfmslaw.com/class-action-lawsuits/cases.php?id=779
If you are the owner of a Late 2006 iMac (Model ID: iMac5,1. Order#: MA589LL) with ATI X1600 and are having the same issues, leave a comment. Or better yet, post a video of your own and link to me. United we stand, divided we fall.