New 20" iMac: Problematic

Hello everyone,
This past Sunday I took the plunge and bought a brand new iMac intel Core 2 Duo with a 250 GB HDD and 1 GB of RAM. I bought this iMac at a local Bestbuy here in Jersey. I brought it home, and set it up with my SAMSUNG 1080p 22" monitor, Apple bluetooth Keyboard and mightymouse, and a Western Digital 350 GB HDD hooked up via USB. I was excited to finally jump on the intel-based Mac bandwagon, as well as experience dual monitors for the first time.
That was Sunday. Tuesday evening I was watching "Rome" on itunes on my Samsung monitor while surfing the web with Omniweb on the iMac monitor. Out of nowhere, everything locked up. I was able to move my cursor, but nothing responeded to my clicking. I hard booted the system and loaded everything I had going again, and sure enough, it locked up a few moments later. I ran system update, updated everything, then restarted. Time went by and although not immediatly, later that night it froze up on me again.
Fast forward to last nite, and the freezing reached and all time high. 5 times. Each time was when I had a browser open in my iMac window and I had Quicktime playing in my Samsung monitor. I was watching a UFC fight card, with the player fit to the screen.

I have read many posts about iMacs freezing late last year, but there was a firmware update that evidently fixed that. I have this update installed, and I have had no luck. I even called Apple Care where I got instructed to unplug everything, plug it back in, start in safe mode, delete cache. Guess what? That didn't help me out at all. If anyone can diagnose my situation, and reccomend what I need to do next, I would appreciate it greatly!

P.S.> Am I right in suspecting I have a faulty Video card? I just ordered 4GB of RAM from OWC, could this be a RAM issue?

i am not the one to be able to read it but you could post your crash report and see if someone better at it then i can decipher it for you.

in finder go to username/Library/Logs/CrashReporter double click on the last crash or the one you might believe is associated with the time it happened last.

this will bring up a console message go up to file in the task bar and choose "save file as" and then post that here for others to view and try to figure out what might have caused the crash. if it is really long host it somewhere to be downloaded rather than have a super long post.

that might help

im sure others will have other suggestions

ooh you could also try resetting the PRAM and PMU resetting the PRAM and PMU

it could also be a failing HDD, or a piece of 3rd party software that is causing this as well.

or maybe faulty memory LOL

i know thats a lot but the possibilities are large here

Now my iMac does not recover from Sleep, I have to hardboot it to start it up. This morning I got about 5 minutes into browsing my daily sites and if froze up, I didn't even have the other monitor on or any movie files playing!
I am now running a hardware diagnostics test. I ran one yesterday and everything showed as being fine, but today's is taking considerably longer and I am afraid it has locked up while performing the test.

I will try the resetting of the PRAM today, as well as post the latest crash report in hope someone here can provide their opinions/ideas on what is causing this.

This really sucks, I have had an ibook for 3 years now that never has given me any trouble. I also bought a powermac g4 that was great for what I used it for, also never giving me any trouble. Maybe I am just not compatible with intel processors and I need to stick to power PC

This sounds like a ram problem 1gb is not enough to do many things at once.