Hey marco
yep - i had your doc printed out and was following alongside it. As soon as it came up for the first time in safe mode, i blew away the drivers (ATIX1* and ATIX2*) and then updated to 10.6.8. this would be right after step 7 & 8 on your list. I was getting display artifacts pretty much immediately but I only had one crash/freeze. Last nite, I tried to push it one more time (~10 standard def video recording in iMovie from the web cam, then running the stabilization filter after it recorded). It actually kernel panic'd. 20 minutes in.
what I will say is that I had issues booting from the SL media using the internal DVD drive (i've had issues with it before and I think its trashed at this point). I actually had the DVD temporarily stuck in there as it would not eject.. so I had to do the mouse-button down trick while the system powered on to get the thing out. I also made sure I had the Option key pressed so I would not boot off the hard drive... this is actually the reason I wanted to run through it again before throwing in the towell. Since you were very explicit in not booting off anything except the SL DVD, I thought there was at least enough of a chance that something could have been loaded to try it again. That and at this point I have nothing to lose.
One other thing I wanted to throw out there to everyone - my system was working fine for months. No artifacting, no overheating, no crashing. It seems that everything started after I upgraded the HD. I took out the 7200RPM 100GB disk and upgraded to a 5400RPM 250GB disk. 2 questions from that - 1) has anyone else with this issue upgraded hard drives and 2) does anyone think this could be part of the issue some crazy way? I am actually going to try another disk (not the original though) when I do this PRAM trick again.
I should have some time tonite/this w/e to try this again.. let's hope our power stays on underneath Irene (I'm in the northeast).
-Lou