This was mentioned in another thread, but I'll reiterate it here.

The gray discs that come with their respective Macs only work for the systems they ship with. So while you could use that installation disc with an infinite amount of 20" AL iMacs (licensing issues aside), that's all you can install them on. They will not work on other Macs, even if they are Intel based like the AL iMac. Only the retail versions of OS X can be installed on any Macintosh, PPC or Intel.