iMac lock up

Help required!
I am using Mac OS X version 10.6.6.
Computer locks up almost daily, on shutting down and restarting I often get a grey screen with a "folder" icon located in centre of screen, this to is in grey but different shade, icon flashes continuously.
It takes several shut downs and plug pulling before a successful reboot is achieved. Would appreciate help!

Can you give us the specs on that iMac? How old is it?

This is a guess but it sounds like the hard drive is dying or ready to die. Do you have the DVD's that came with the iMac? If so, put in the 1st DVD and run the Apple Hardware test by booting holding down the D key after the Startup Sound till you see the loading screen. Run the extended test and see if it finds anything wrong.

Imac lockup

Computer is roughly 3years old, the spec is:
Hardware Overview:

Model Name: iMac
Model Identifier: iMac8,1
Processor Name: Intel Core 2 Duo
Processor Speed: 2.66 GHz
Number Of Processors: 1
Total Number Of Cores: 2
L2 Cache: 6 MB
Memory: 4 GB
Bus Speed: 1.07 GHz
Boot ROM Version: IM81.00C1.B00
SMC Version (system): 1.29f1
Serial Number (system): VM903Y1RZE6
Hardware UUID: 246EA07C-7889-5622-BABC-BFCE4939D828

Should have the discs you refer to, will try your suggestion

If you have the DVD's try the Apple Hardware Test I mentioned above and report back.