I teach at a school in IL and we purchased several of these iMacs. In August when school started I fired them up after they had not been used all Summer, and we had three machines with vertical lines. More of these lines appeared each month.
I'm not the tech guy but I do teach the students how to use the macs for yearbook purposes.
As a school, we can't afford Apple Care. The machines are locked down so I always felt we were pretty safe because Apple quality is generally great. We still use the original "desktop lamp" iMac on a daily basis. The only thing wrong with it is the screen's mechanical arm is a little loose, but the kids love it the best as far as beauty....but she is a little slow.
This really screws us. If we lose 3 or 4 machines and it costs us a boatload to fix them or replace them, the school will probably say screw it. We can get a new Dell for $500. This really stinks if Apple sold them knowing there was a defect.
The one saving grace may be that if anyone wants something done like a DVD, video editing, pictures adjusted, or a strange document format opened...they always come to me and we head to the Mac Lab because if the problem needs to be solved the Macs can do it.
This ticks me off because Apple is putting my reputation at stake. I told the school this is the route you should go if you are serious about digital arts.