First I think it is a corrupt system folder.
A corrupt disk means you'll get a question mark. It won't be able to see a valid OS at all. Yours does, but starting up may be compromised, because of corruption of the OS. If it is a bad disk and you didn't backup, well, then....
Also it can be a Kernel Panic, but I don't think so, because that shows a different screen.
It happens; you can find information here: http://docs.info.apple.com/article.html?artnum=106227
Scared the living shit out of me, first time it happened. It is easy to fix.
Could be RAM gone bad. It happens too. (things get hot) Run the hardware test DVD. Sometimes that doesn't help. Harware test is not perfect BTW. And is frustratingly slowwwwww.
Here's what you do first:
Startup the machine from the installation DVD that came with the machine. Hold "C" during startup. http://docs.info.apple.com/article.html?artnum=75459
Check if the OS sees the disk.
If it doesn't even start up from the DVD then something is very wrong. And it needs to go back.
OK, it starts up. sees the disk, but cannot read it.
Do not initialise this disk rightaway. It will overwrite your files.
Run Diskwarrior to repair the disk. http://www.alsoft.com/diskwarrior/
If Diskwarrior doesn't fix it, something is wrong with the disk, and you need to get it back to the shop.
Ok, it sees the disk, can read it, but starting up from that disk isn't possible.
Do not initialise the disk, but overwrite the System Files, by installing a new System on top of it. Check the options when installing, this is important. Do not "clean install" before you tried the other options. Run Diskwarrior and Disk Utillity one more time anyway.
Alternative: Start up from a different disk, and run Diskwarrior Memtest Disk Utillity etc. from there. It is generally a good idea to have a second OS sit on another disk. It saved my ass a couple of times.