Aluminum iMac Intermittent Airport Dropouts

What is the distance like between the iMac and the Airport Express? Try moving them closer together (if only to try it) and see if the issue improves. If so you may want to consider location of the iMac vs. the AirPort Express or perhaps replacing the express with an AirPort Extreme/Time Capsule. You also may want to consider consulting a specialist to look at the pieces of equipment in their current environment (Apple Consultants Network - ask your local Apple Store)

Are you using a newer airport express with N? it is much more reliable as it isn't as vulnerable to interference. If you have one of the older ones, it only works on G so not as reliable - spend the money to get a new one, or best get the Airport Extreme which has better antenna etc.

Same problem with 'N' airport extreme. Windows XP machine connects perfectly everytime, it's the Mac. Help!

I solved my problem through trial and error and good luck. First, I have the new airport extreme, so I don't know if this is the same for airport express. My problem with the network connection dropping was the same, even when sitting 6 feet in front of the router.
I did two things, one or both of which solved my problem. First, using the Airport Utility, I clicked on Manual Setup and under the Wireless tab, I set the Channel to 10. Then, I clicked on Wireless Options and clicked on Use Interference Robustness so that it was checked.
It's been a week now and I've not lost the signal once. I suspect the solution was the Interference Robustness option. It says that it may slow network traffic, but I've not noticed it.

Aluminium iMac 3.06 Ghz Intel Core 2 Duo
My dropouts happen when the computer comes out of sleep or boots up. My workaround is to disable it's airport, then re-enable it. This fixes the problem completely (no wireless problems at all)... until the next sleep or boot-up.
I should state that the dropouts happen like this 99% of the time, and are fixed by this solution 99% of the time... meaning there have been exceptions - but not many. I do this many times a day on returning to my computer.

It is for this reason that my new Time Capsule is operating solely as a glorified hard disk, connected by LAN cable to my iMac, with it's wireless capability disabled.

Through a long series of experimentation's I have determined that the problem is not:
1 my modem (have two other working macs - including a friends iMac),
2 the time capsule (no longer trying to use it for wireless backup and the problem still happens when time machine is turned off and time capsule unplugged)
3 not any other wireless device or network. (Have tried turning them all off one at a time and together and the problem still happens.)

However I took my computer to a friends house and connected to there wireless and it worked great - though I was only there for an hour. They were using WPA2 protocol. I'm on WEP here. I have tried one other protocol with the same problem. I can't try WPA2 as my wireless modem doesn't support it and even if I re-setup my time machine to be the wireless hub, I have a flat mate with an XP machine that doesn't support WPA2.

Trying to be positive: I like everything else about the computer. Definitely not this though.

My dropouts finally turned out to be too much signal on the coax coming to the cable modem. Cable company removed an amplifier that a previous installer had installed and voila - no more dropouts. Windows machine never did drop out, before or after, and not a single Mac dropout since.
Go figger.

I'm having the same problem with my intel white iMac, my Unibody MBP will connect fine and the iPod touch, the only way I can get it to work is if I tether the iMac from the MBP, this is not ideal at all