2006 iMac OS X Lion Trouble

I just bought an iMac from a friend and I am having trouble getting it to work. It's telling me that I have to restore it with a new Mac OS X Lion 10.7 or something and it won't even let me install it from the App Store. Someone help?

I'm guessing this computer came with older software that had a CD installer. Did your friend give you the CDs?
Exactly what issues are you having that requires a restore?
When you sell a computer that has been upgraded, the new user will not have access to the Mac App Store (MAS) with the Apple ID that was used to purchase OS X. I think this is where you are at currently.
An option if your Mac qualifies is to create a new User and download Mavericks free and do a clean install of the system.
OS X Mavericks: System Requirements  (look under the Apple in the Menu bar > About this Mac to find what Mac you have.
To install Mavericks, you need one of these Macs:
          ▪          iMac (Mid-2007 or later)
          ▪          MacBook (13-inch Aluminum, Late 2008), (13-inch, Early 2009 or later)
          ▪          MacBook Pro (13-inch, Mid-2009 or later),
          ▪          MacBook Pro (15-inch or 17-inch, Mid/Late 2007 or later)
          ▪          MacBook Air (Late 2008 or later)
          ▪          Mac mini (Early 2009 or later)
          ▪          Mac Pro (Early 2008 or later)
          ▪          Xserve (Early 2009)
Your Mac also needs:
  ▪ OS X Mountain Lion, Lion, or Snow Leopard v10.6.8 already installed
  ▪ 2 GB or more of memory  <---Personally I would recommend a minimum of 4GB.
  ▪ 8 GB or more of available space
While your computer might meet the requirements, also check your applications for Mavericks compatibility here:  http://roaringapps.com/
Lion and later does not support PowerPC software. They must be Intel native.
It's highly recommended that you backup to an external drive first in case there are problems with the upgrade. Both of these applications can be used to create a clone.
SuperDuper! http://www.shirt-pocket.com/
CCC http://www.bombich.com/download.html

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