I updated the firmware on my iMac SE (July '01 series, 700 MHz) with no ill effects. I added a 256 MB RAM stick soon after purchase, then ran DIMM First Aid to make sure the new RAM was "OK"
http://www.versiontracker.com/moreinfo.fcgi?id=10415&db=mac
I had just updated the OS to 9.2.1 and...