My friend has a problem with his iMAC, where he starts up his computer, and then he is confronted by a blinking apple logo which turns into a folder with a question mark on it. I'm a Windows guy, so I don't know what this could mean. My guess would be that a folder is missing..if anyone knows a solution to this problem feel free to share.

-Oh yeah, the last thing he was doing was installing an update.

hum, never seen that one. have your friend go to the Apple Logo in the upper left

pull down to Software Update,
and perform whatever is shown.

this will restart any failed installs

Hmm, well there isn't anything on the screen except a white backround with an apple logo in the middle, blinking..it used to be going from an apple logo to a folder with a question mark, but now it's just a blinking apple logo.

The blinking folder with a question mark is bad. It usually means hard drive failure, hard drive corruption, or a bad ide/sata controller on the motherboard. I'd bet on it being a hard drive failure though. Which iMac model is it? There are three general imac series, first is the crt based(colored) units, second is the lamp shaped(or some call "soccer ball") imac with adjustable "neck", and finally the newest is the imac flat panel with everything integrated into the flat panel, and a metal foot.

If your friend has applecare, he can use the diagnostic cd that came with the applecare to try to diagnose the problem. Otherwise, it should probably be taken to an apple service center, since they aren't the easiest units to disassemble(it is doable, but time comsuming).

Yeah, he has the newest iMac, the flat panel.

He put the installation disk in and now he is reinstalling Mac.