Last week I reported that after the release of Mac OS X Lion iMac users were complaining about graphic or video problems. I was experiencing some of the reported problems too. My particular problem was akin to what others have seen on their 2011 27-inch iMacs configured with a 3.4GHz quad-core Intel Core i7 and AMD Radeon HD 6970 graphics processor with 1GB of GDDR5 memory. The problem is intermittent and it always disappears for a while after a restart. See above for an example of how my problem manifested itself.
I contacted AppleCare about the problem, but no fix was available and they claimed that they had never seen this problem before. On the other hand after I submitted a bug report to Apple I got a completely different answer from Apple engineering.
Although Apple engineering is aware of the problem no information was available on when a fix would be released to prevent it from happening again. Therefore I recommend that you install any updates that Apple releases since those updates might resolve this problem.