Resetting PRAM and NVRAM might be slove this issue
- Shut down the computer.
- Locate the following keys on the keyboard: Command, Option, P, and R. You will need to hold these keys down simultaneously in step 4.
- Turn on the computer.
- Press and hold the Command-Option-P-R keys. You must press this key combination before the gray screen appears.
- Hold the keys down until the computer restarts and you hear the startup sound for the second time.
- Release the keys.
Your computer's PRAM and the NVRAM are reset to the default values. The clock settings may be reset to a default date on some models.
Source : http://support.apple.com/kb/HT1379
Boot from your Install Disk 1 and Repair fixes the brightness preferences.
If not working any of above operation : This is answer :
Power Management: Hibernate, Standby, Screen Sleep, Screen Brightness. The iMac G5 uses System Management Unit (SMU) rather than the more common Power Management Unit (PMU) for its general power management. This is not well supported. Both suspend-to-disk (hibernate) and suspend-to-ram (standby) are not working; standby is unlikely to be possible at all, a hack for hibernate is in the early stages for the G5 processor (by Johannes Berg). I have not figured out any way to put the screen to sleep, and the screen brightness also doesn't seem to be configurable, which is annoying because the default screen brightness for the iMac revA (Nvidia) is set quite low.