Glad your memory change fixed the issue for you, but I'm afraid that is not the universal solution.
I'm having the same GPU white screen error on my late 2009 27" iMac core i5 10.7.5(11G63) with ATI Radeon HD 4850, e.g.
7/25/11 9:40:42.000 PM kernel: ** Device in slot: SLOT--1 **
7/25/11 9:40:42.000 PM kernel: ** GPU Debug Info Start **
7/25/11 9:40:42.000 PM kernel: 0x00006720
7/25/11 9:40:42.000 PM kernel: 0x0000008f
7/25/11 9:40:42.000 PM kernel: 0x00000001
7/25/11 9:40:42.000 PM kernel: 0x00000018
7/25/11 9:40:42.000 PM kernel: 0x0000a880
7/25/11 9:40:42.000 PM kernel: 0x00000001
Comes up to a white screen with just a cursor unless I boot in Safe Mode.
This only started when I updated to 10.7.5, never ever had any graphics issues prior to this. I have read read countless threads here and on other Mac forums, there does not appear to be any fix for this. The nearest I have seen is where people under apple care have had their entire logic board replaced.
I can only suppose that the software update did something to the graphics driver, and Apple are not owning up to it as yet. Until then, I'm stuck in Safe Mode, can't run Parallels, Networking, etc. At least I have ethernet, so this is not just an expensive 4 year old heap of junk.
The wierd thing is, my wife's 24" Mid 2007 iMac Core 2 Duo, also running 10.7.5 (11G63) but with ATI Radeon HD 2600 is having no issues whatsoever!