Squares and Lines on iMac Display (mid 2010)

You mean, it's like smudged dirt? You see it all the time no matter what as long the LCD turned on?

If so, then it's physical damage on the LCD, iMac classic (read: common) problem. You need to bring it in and Apple will replace the display for you, problem solved. I hope you got AppleCare with it.
Or risk it away and try clean it yourself first if you're OOW, there's a famous thread here discussing that dirty display.

If not, it could be the GPU. Well not necessarily much better or easier, but at least your display is fine.

 

Hard to tell by this photo but you might be looking at a graphics issue or, heaven forbid, a logic board problem. Any other symptoms?

 

When booted into your account, take a screenshot (cmd-shift-3).

If the screenshot has those lines, too, it's a faulty graphics card; if not, the LCD is defective.

 

My early 2008 iMac showed these lines and I could not finish the boot process. I tried all different boot commands. I called Apple and they surmised the logic board was the problem. It is in an authorized Apple shop right now for what I hope is not a postmortem examination.

WHERE ARE THE NEW iMACS? i need one now!

 

I guess they don't make a difference between the logic board and the graphics card. "Geniuses"...