Letters and lines across the screen? Video Card failure?

I built my first computer about a month and a half ago, and ive had some issues, but finally i got xp up and running, everything went good for about 2 days. But on Monday night i left the computer on over night to let it do a virus scan since i had done some web surfing and downloaded some programs before i put the anti-virus on. So i went to school tuesday, and when i got home, i turned on the monitor and all i could see was a bunch of random letters and blue lines running vertically across the screen. So i immediately restarted, and the lines are still there, but after a while, a message came up and said that there was a failure with some file. Then it said that the error could have been caused by either the driver being stuck in an infinite loop(no idea what that means), or that the device itself is broken. The file it listed had the letters ATI in it, and since im using an ATI raedon card, i figured it must have been the video card. So i went to school today, and i asked my IT Essentials teacher what he thought, and he gave me an old video card to try to use to make sure that the error was the video card. I got home and i put in the video card, but left in the old one. Then i turned on my computer and i get no video at all.

So now i have a few questions. What should i do? And, could leaving the "broken" card cause the other video card not to work?

The "broken" card is PCI Express 2.0 x16, and the old one from my teacher is PCI. I'm running a new, 700W Power Supply so im pretty sure thats not the issue. I have a warranty on the card if it is broken.

The thing is, the lines are there no matter what. BIOS, boot screen, etc. I tried to reinstall xp, but the lines and letters are still there, so i really cant see enough to get it installed. I dont have any copies of Vista or W7 around.

My specs are:
Asus P5Q Motherboard
Kingston 2048MB PC5400 DDR2 667MHz
HP 383697-002 DVDROM/CDRW Internal Combo Drive OEM
WD Caviar 640GB Serial ATA HD 7200/16MB/SATA-3G
Intel Core 2 Duo E7400 Processor 2.80GHz, 3MB Cache, 1066MHz FSB
Sapphire Radeon HD 3450 Video Card - 256MB DDR2

Ya its through a VGA connection.(If i had a DVI cable i could do that too). So what i think i might do is bring in my video card to my teacher and ask if i can test my card in one of the computers in his classroom(ive done a lot of things with these computers, so i doubt he will care, but ill ask first). If the card doesnt work, then its time to make a call to radeon i guess. Thank goodness i have a warranty. My only other question is, could leaving my card in make it so i cant see anything with the old video card my teacher gave me? I tested that card at school and it worked, but it doesnt do anything at home.

its PCI, the other one is PCI express x16, but i still dont see why it wouldnt work..................

so your trying to test a bad video card by leaving it in the system? good troubleshooting