iMac Update 1.0 was created to improve performance in iMacs with 233 and 266 MHz processors. It is not required, nor is it compatible with iMac 333 MHz and iMac (slot-loading) models.
This article provides a solution if the iMac Update 1.0 is accidentally installed.
The iMac Update 1.0, which has been widely distributed on many third party software CDs for use on early iMac models, can be accidentally installed onto more recent iMac computers overwriting the more current Mac OS ROM file. This can cause the iMac to behave unpredictably or start up incorrectly, sometimes indicated by a blinking folder icon.
If you do install the iMac Update 1.0, you must replace the Mac OS ROM file with the version included with your computer, or a later version. To replace it with the proper version, do the following:
2. Double-click the System Folder in the Software Install CD window.
3. Drag the Mac OS ROM file from the System Folder on the Software Install CD to the System Folder on your hard drive and click OK.
4. Restart your computer.
The Knowledge Base article 58174: "iMac: When to Install Available Updaters" has a complete list of the available updates and which ones should be installed on each iMac model.