Need help with possible kernel stack error?

Hi. I have three questions below.

I have a new iMac (which I hate), bought last Christmas, and I think it's dying. My G4 just bit the dust last year, and it was having kernel stack errors before it died. We replaced the hard drive several times, but it just eventually died. This iMac is actually the second machine, and this is it's second problem. The first one quit booting after a week, and this one had a kernel stack problem. The Apple store (which isn't very helpful) took this computer, which was a few weeks/months old, kept it for a while, and told us they rebuilt it.

Programs are freezing on me (different ones-usually Microsoft Word and Firefox. I have to use them for work.) and after I do a Force Quit, a report is sent to Apple. It's clearly talking about kernel stacks, but I don't see the 'kernel stack error' or 'kernel panic' (I can't remember exactly what the G4 said when it was dying.)

1. Is this a hardware or a software problem?
2. How can I figure out what is going wrong? The people at our Apple Store have never been able to help us with anything once they finally came to town.
3. Did I get shafted at the Apple store? Would it be better to try to call someone in California?

Thank you in advance for reading this, and thank you for any advice you can provide.
Betsy

I guess you mean kernel panic problem?
(a stack is a memory data "structure" - nearly every part/program in your computer uses stacks in some way - so we wouldn't usually say kernel stack error.)
kernel panics are often caused by hardware problems (hard drive, motherboard, RAM, etc) or by corrupted data on the hard drive.

I think the local store is better than calling Apple -personal pref.

Start from your Install DVD (or the restore partition for Lion), but don't Continue the re-install. Instead, find Disk Utility in the top Finder menus and use that to repair the hard drive.