Answer to: Unit shuts itself down. Only special Apple labeled HD to be used?You can get a "power supply repair kit" online for a few bucks (maybe 10 euro?). You need some tools and a soldering iron, but you can replace the capacitors on the power supply board and it will work fine. It takes about an hour.
Answer to: CPU upgrade 2.0GHz to 2.8Ghz ( C2D Extreme X7900 )I finally sold my X7900-boosted Mid-2007 imac and got a late 2012 on ebay for $800. Time to move to the next level! I'll look at swapping the 2.9Ghz i5 with an i7 and report later. I got as much speed and work out of the old girl and I think is economically via, but it's time to move up to something that's supported a little better by the new OS X Mavericks.
Answer to: CPU upgrade 2.0GHz to 2.8Ghz ( C2D Extreme X7900 )Yes! I was able to swap out the processor on my T7300 20" mid 2007 imac to an X7900 by following the instructions for replacing the heatsink here: iMac Intel 20" EMC 2133 and 2210 Heat Sink Replacement When the heatsink is removed, the CPU is exposed. Turn the slotted screw on the socket 180 degrees to release the CPU and install the X7900. I do have a caveat: The connectors on the wifi and bluetooth antennas are extremely delicate and hard to get off/on. I just unscrewed the daughter boards, there is enough slack to leave them attached to the antennas. After the install and reassembly, the computer booted up fine, there were no settings to make, firmware flashes or any other special procedures, just turn it on and bask in the glory that is the Core 2 Duo extreme. Update: Yeah, it runs just great. No heat issues or any glitches. The 64-bit geekbench score when from 2749 to 4239, an improvement of 54%. I also put a 4GB in one slot and a 2GB in the other for 6GB total RAM.