iMac (Possible Hardware Issues)

Well, i got a new iMac some few weeks back and it's been working great until i got like 2 kernel panics the second day i opened it, i also started having problems with iTunes in Cover-flow where i think the graphics would just look horrible... something like this:




And it also happened with some effects on iMovie 06.


I think it must be the graphics card and i did upgrade my Ram to 2 Gigs.


Does anyone have any ideas of what this could be, before i change the iMac for a new one?



i have a 20 inch iMac with 2.0 Ghz and 2 GB of Ram


ATI,RadeonHD2400

VRAM (Total): 128 MB