A while back my screen started getting really messed up and it would also freeze the computer. It's kind of hard to explain what I'm seeing so I'm going to include links to 4 pictures I took with my camera (sorry for poor quality).
Facts: It's a stock Geforce 8600GT. The problem would occur probably once a month for the past 6 months. One day I decided to install rivatuner to monitor temp/fan speed and the problem escalated. It would happen every time I opened up a graphics-intensive program (Mw2). Now it happens right when I turn the computer on.
At this point I would back up your data and reinstall your operating system. Your system files could be corrupted and that's usually the case when it gets like this. If you do a fresh format/install and it still does it, then I would probably try a new video card.
Have you tried a different monitor with the card? That would actually be the first step, to where you didn't have to spend any money to possibly find the problem.