It is sad Apple pushes for thinner design. I don't think it would be a problem for an iMac to be thicker. It may even get more stylish, if it did not have that curve in the back. They could have put a bigger cooler, bigger fans, maybe even 120mm fans and so avoid all the problems that people are going to have very very soon.
I am sure soon the graphics cards will begin to fail, screen stains, maybe a cheap DVDs get melted in the SuperDriver.
Video encoding is not as CPU demanding as Rendering (even though the Activity Monitor shows 100%, it is still not 100%). But I think the CPU is not as a big of a problem as GPU. CPU+GPU running together at max at the same time is of course dangerous.
On my old 20 inch I put Arctic Cooling MX2 Thermal paste instead of that white foamy stuff they put in there and temps imrpoved significantly. The only problem for me was to put the glass panel back on without leaving dust behind it.
By the way 70 is maximum what Intel recommends for i7.
I do not agree with you about "pretty good cooling performance" as this "perfomrance" is the worst!!! on the market. I like macs a lot (mainly because of OSX and Final Cut and User experience), but I don't like the hardware.
Where do you live? It gets very hot in Los Angeles in summer...
My temps on my windows machine i7 @ 4000mhz using lynx. I will never reach these temps (of max 66) using normal programs. This was done with Linpak Lynx. Unoverclocked it runs 55°C with Lynx and about 52° when rendering. The other coolest sample I had was 49°C on one core and other 48 47 46 under full load.
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(the screen is from hardwareluxx.de its my screen)
And actually, the coolness is proportional to noise. My PC is more silent than iMac, even when rendering.
For your own sake, use smcFanControl. Raise rpm to the level you don't hear and be happy. I always turn up rpm more before gaming, just to avoid these spots. And yes, they are from heat!
It is a nice machine! I mean, there is a reason i bought it. Except of course that the magic mouse sucks for mudbox or maya or anything else

I mainly use wacom tablet though