I posted this in a related thread, but wanted to share it here, as well...
After reading other posts which showed no improvement with the recent 10.6.6 update, I tested a downgrade from 10.6.5 back to 10.5.3 last night, after zeroing the drive and resetting SMC and zapping PRAM. I chose this OS, because it was the last version of OS I ran before the problems began for me. With 10.6.x, I'd get a gray screen just after the kexts loaded and the system would be frozen. With 10.5.3, I experienced a wild pattern of graphics anomalies just after the kexts load and the system would also be unusable. We decided to head to a mall today which is an hour away that has an Apple Store, so I scheduled a Genius appointment. After discussing the matter's background briefly with a Genius, he attempted a regular boot and witnessed the gray screen freeze just after the kexts load before login. I shared that a Safe Boot will bypass the kexts and allow access to the system. I also pointed out that the GPU failure artifacts are present even after the safe boot and he witnessed and documented the anomalies present by the cursor (rows of horizontal lines). He then attempted a Netboot from a full OS which froze before the Window Manager, just like I experienced; showing that my OS install's integrity was not suspect. He then booted into EFI-based diagnostics via Netboot that circumvents the kexts and allows comprehensive diagnostics. The only error that was posted in his diagnostics was the right fan, but there was no evidence of GPU failure in the test itself. We both acknowledged the pitfalls of some failures with Apple's Hardware Tests. He, as well as the other Geniuses have all witnessed circumstances where a failure is present but not evident in Apple's provided hardware tests. As a prior consultant and service provider myself, we shared some related personal experiences which were similar in this regard. After documenting the experience in detail at my request (including these specific thread references), he offered me the flat rate repair of $310 with a 90-day warranty on the replacement of the logic board, fan and lcd (which had some minor signs of wear). I told him of my concerns that others who have opted for the repair had the problem resurface shortly down the road - indicating that the refurbished parts used in the repairs have not had the issue resolved. He assured me that if such a situation occurs, we would simply have to return to an Apple Store (even after the 90 day warranty period) to discuss the matter - which would already be documented; and they would work to make the situation right. He also said that should Apple decide to initiate some sort of repair extension for this in the near future, that we would be able to get reimbursed for our $310 flat rate repair charge. So I'd recommend that EVEN IF YOU OPT NOT TO GET YOUR SYSTEM REPAIRED, please get it diagnosed at an Apple Store, if possible. According to the Apple Genius who helped me today, the results of the EFI-based diagnostics and the written report of the Genius are automatically sent to Apple Engineering for review. If this is really a widespread occurrence (as it would appear) and you seriously wish to receive some sort of reparation for this failure, I can think of no better way to make your case. I'll report back once I receive the repaired system and have a chance to assess the returned system and performance. Thanks again to everyone who has contributed to these threads.