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The Mid 2010 iMac needs a special Mac OS X version that provides support for its hardware. That's the reason why you can't install Snow Leopard using its retail disc. Call Apple to get replacement DVDs > http://support.apple.com/kb/HE57
After getting replacement DVDs, insert the Mac OS X Install DVD, hold the C key while your Mac is starting and install Mac OS X. You may need to erase the disk with Disk Utility
This model iMac, came with either OS X 10.6.3 when it first came out and then later shipped with OS X 10.6.4.
You can get new system restore discs for your model iMac by calling Apple at 1-800-MY APPLE and ask for software sales. Ask them for a set of system restore disc for a 2010, 27 inch screen iMac. You will need to give the Apple rep the serial number of your iMac. These discs will cost less than $20 U.S. with shipping included.
You should get the proper system discs for your particular iMac model and serial number.