Many Mac users have had problems with the graphics card in the iMac, especially with the 7300 and 7600 GT that came in the last white 24" iMac. Phillipe, one of our readers was able to repair his own quite easily:
Many white 24" iMac users have had many problems with the graphics card, either with the 7300 GT or the 7600 GT. I had the problem on mine and I was ready to change it because it was impossible to work on it (freezes of sometimes over a minute, a dozen times per day!) Since the replacement card costed 200€, it was not worth it.
After taking apart the computer to gain access to the graphics card, I noticed that the screws holding the heat sink in place had not been tightened properly, and that the thermal compound was fried, which was probably causing the card to overheat and then to freeze the graphics.
After replacing it and putting it back together (I also cleaned the inside entirely), everything started working perfectly and without any freezing (it has been a week now)
I think that this could help many readers to repair their iMac at almost no cost, and maybe prevent the graphics card from overheating irremediably.
You can find more details about it on his blog. It is in French but if you are interested, we can provide you with a translation.
On a side note, we have recently given a second life to a 3 years old aluminum 24" iMac, by taking it apart and cleaning it entirely. From a slow and very warm computer, it turned into what it was on its first day.