Today, Apple released an update called iMac Graphics Firmware Update 1.0 which specifically addresses the freezing issue seen on recent iMacs.
This update is for 20-inch and 24-inch aluminum iMac computers with the ATI Radeon HD 2600 PRO graphics processor, running Mac OS X 10.4.10 with iMac Software Update 1.2.1 for Tiger, or Mac OS X 10.5 with iMac Software Update 1.3 for Leopard.
According to Apple, the download updates the graphics firmware on the ATI Radeon HD 2600 PRO card to address issues that may have caused the computer to freeze.
Early reports from iMac users have been promising. One user posts that his benchmarks before and after update are the same, so there's been no speed downgrade involved in the fix.
Numerous reports confirm that it does fix the problem that has been widely reported. One report is reproduced here:
Guys, this update is the real deal. I have a bad freezer that is actually scheduled to be shipped back to Apple for a replacement tomorrow. I applied the firmware update (and 10.5.1) and have been working it hard for the past two hours, doing all the stuff that used to make it freeze in minutes. iTunes visualizer, CoverFlow, screen savers, Photo Booth, Front Row, the whole nine yards. Not a single freeze. I had this thing freezing on command before.
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