I also get these identical symptoms when trying to use iPhoto '11 on the same model iMac. To be explicit:
I have a 2006 white Intel iMac 24" with 3GB RAM and nVidia 7300 GT, running Snow Leopard (was 10.6.5, now 10.6.6). When I try to use iPhoto '11 (9.1.1), the system freezes quite regularly when performing simple operations like double-clicking a photo for viewing/editing. "Freeze" means the mouse cursor still works, but the user interface is otherwise completely unresponsive for up to a few minutes. Once I get control back, the graphics on screen sometimes appear corrupted. During the time of a freeze (and no other time) there are always Console messages as follows:
1/9/11 8:53:35 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:53:35 PM kernel NVDA(OpenGL): Channel exception! exception type = 0x6 = Fifo: Parse Error
1/9/11 8:53:35 PM kernel 00000069
1/9/11 8:53:55 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:54:15 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:54:36 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:54:36 PM kernel NVDA(OpenGL): Channel exception! exception type = 0x6 = Fifo: Parse Error
1/9/11 8:54:36 PM kernel 00000069
1/9/11 8:54:56 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:55:16 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:55:16 PM kernel NVDA(OpenGL): Channel exception! exception type = 0x6 = Fifo: Parse Error
1/9/11 8:55:16 PM kernel 00000069
1/9/11 8:55:36 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:55:56 PM kernel NVDA(OpenGL): Channel timeout!
1/9/11 8:56:16 PM kernel NVDA(OpenGL): Channel timeout!
I submitted a detailed report using "iPhoto -> Provide iPhoto Feedback", and as promised did not hear anything back.
I'm also in the process of working through Apple tech support. I've been bounced around to several people, all of whom were polite but dismissive when I described the Console messages and the numerous detailed reports on these forums of the identical problem with no cure. They note that there's a lot of negativity and misinformation on user forums, and then ask me to try a series of things like deleting old preferences, creating a new iPhoto library, etc. They've graduated me to senior tech support, and the last thing they had me try was:
Create a brand new partition on my hard drive, install Snow Leopard and iPhoto on it from scratch, and create a tiny iPhoto library by dragging in a dozen images from /Library/Desktop Pictures/.
On that bare-bones setup I've confirmed that iPhoto '11 has lots of freezing, whereas iPhoto '09 works flawlessly. Senior tech support had me capture some system info during one of the freezes, and has sent it to engineers with hopes of hearing something back this week.