Had the same problem. I took mine into a "Mac Genius" at the retail store and he thought he had fixed it by rebuilding the directory. It booted and shut down perfectly while in the store. When I got home it was went right back to booting into open firmware.
I figured out by accident that the reason it was booting fine in the store was because he was using a cheap SVGA monitor on the DVI output - not the ADB connector I use with my older Apple monitor. Note that Apple has phased these type of connectors out. It gave me a great excuse to upgrade my monitor to a 20" cinema display and everything is working great (can't believe how I've deprived myself all these years).
If you have an older monitor that uses an ADB connector, try a different monitor that uses the DVI output on your video card. Even a DVI-VGA adapter (one probably came with your computer) with a VGA monitor is sufficient for testing. If your computer boots up, it's either the older monitor, or the ADB output on the video card that is bad. There is no easy way to know where the actual problem resides (the Geniuses couldn't tell me - they have no monitors in the store with ADB connectors), but I can tell you that my computer is working fine now. I do know that the ADB connector ran power, USB and video all together and that seems to be the reason they quit using them. The newer desktops have only 2 DVI outputs (instead of 1 ADB + 1 DVI), while the new monitors run power, USB and video separately.
Hope that helps,
Jeff