I can't believe (well maybe I can actually) that Apple still haven't got their heads round this one years on!!!
If the problem is firmware related or if the firmware is not up-to-date then don't put OS X anywhere near the iMac as it can hose some hard-to-get-at PRAM-related settings. Above all don't reset the PRAM.
If her computer booted up with the os 9 disk by holding the c key down and will do it again do yu think I can click reboot in OS 9.2 and if it does that go to the internet and download the firmware. If I can update the firmware what do you think the chances are that it will then reboot in os x again normally?
That sounds a good procedure. You have to boot OS 9.1 or 9.2.x from the HD in order to install the newer firmware. Once it's done then OS X should boot up nicely. If you get into problems check out the link dreed2 posted earlier at reply 1.2.
I've not read through the gory details of your original problem so can't be sure whether or not it's related to firmware but the firmware should always be checked and updated if necessary first.
Maybe if I had taken Apple to court over this shambles they would have got their act together ... but probably not ...
Good luck
Giles