Of Death(TM), leaving me unable to boot up from the boot volume
"Macintosh HD". Luckily I have bootable OSX clone partitions on
external drives and was still able to use the computer. That's what I
get for upgrading iTunes and then deciding to get all the other
upgrades in Software Upgrade.
I still wasn't sure about how Time Machine would behave so I rang
Apple Support, since I I still have AppleCare until January 2011. The
very helpful Susette from Apple Support in Singapore was able to
restore my machine to working condition with the help of Disk Utility,
following these steps.
Of course, YMMV, and I give no guarantees that this will fix *your*
system. This is just what fixed my problem.
1. Boot the iMac from OSX Install Disk 1.
2. Select "English" as the language, then run Disk Utility.
3. The volume "Macintosh HD" should be listed in the available
volumes. If it doesn't display, then you might have bigger problems as
the hard drive itself may be physically damaged if the system can't
recognise it (this is the problem I had previously, requiring a visit
from Apple Support and replacement of my hard drive).
Select "Macintosh HD", then click on "Repair Disk"
4. If that finishes and displays a green message with "OK", then
select "Repair Disk Permissions"
5. That finished successfully and I quit Disk Utility, rebooted, and
all was working fine. Yay!