Need help with video artifacts

Hey I'm trying to help someone fix a video card problem via emails and here's the gig:

there are artifacts in the games he plays (ie black and white 2). like wierd coloring patterns and the likes. colors and lighting streching every which way. heres his system:

3800+ X2
1 gig ram
7900GS
300W ps (15 amps on 12V rail)

its an emachine, by the way.

Is the problam his power supply? Or could it be this:

the green circle is where this is connected to the power supply, the black connector goes to the video card. Im no electrical engineer, is it ok to have something like that connected within it self? That awkward wording I know. If I was installing this I wouldve run everything in a linear way, not in a circle like this.

So, whadya think?