Yes you can upgrade, your card, for best results stick to the options offered for your model
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== Update ==
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the correct discription for the 24" Imac Nvidia 8800 GS is MXM HE, I do believe that you can now get a Nvidia 9800 GTX & a Nvidia GT280, both of these are the MXM HE type, I am guessing that as long as there bios is big enough to take the 8800 GS EFI firmware, then that could be an upgrade route, the card would report a slower clock speed (due to the 8800 EFI firmware) , but am pretty sure it will run ok , I no loger possess this version of the Imac , but would be very tempted to give it a try, you would already need to have windows on there so you were able to update the card, I am pretty sure trying to install this with a faulty card woud be a recepie for disaster.
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You could always increase the bios size with a 1 meg bios chip, but again am pretty sure the original will be big enough to hold both the Bios and the EFI.