I bought my iMac 27 inch (Intel Core Duo), last week.. After letting the computer on overnight (for downloading purposes), (I turned the display off but the computer itself was on whole night.. Next morning after like 4 hrs, I start using it, and the horizontal screen flicker appears like the one in this video:
http://www.youtube.com/watch?v=3jWlepBzVMs
I didn't get the blackouts like some ppl had though..
After I ignored it, it kept on coming up more often. However then 1/4th of my screen went wrong and it displayed my screen incorrectly on like 1/4th of the monitor. I shut it down, then powered it on again and everything went away.
My point is what's the point of returning it? It's not defective. All the iMacs use the same cooling fan system. So there's no point. I guess we'll just need to wait for the software update or something like that from Apple.
My opinion is this stuff happens on all iMacs when they reach a certain temperature. It has nothing to do with the hardware I guess. Apple's issuing new ones (just to make the customer more happy) until they solve the issue via a software update I think.
As Ghosti pointed out, this happens b/c there is no auto regulation of the fan speed / usage. What the Apple update should do is: Control the fans after the usage (if intense = blow more ; if idleing = go to lowest blowing setting ). I totally believe this, and ppl are returning their iMacs for no reason. I hope Apple responds ASAP and makes the fix via a software update. Nobody would want extra hassle with returning the iMac, and reinstalling everything on the new one.