Internet, games and movies are all which consume high amounts of memory, power and produce enough heat in the system.
seems more like graphic problem. the graphic card unable to hold the pressure, freaks out.
by the way did the 1ghz, 1GB ram and nvidia256 come factory? because they dont go together! before you can fully use the 256MB capacity of the graphic card, your system most probably would reach its 1ghz cap! and before you can fully utilise your 1GB ram, your system agan would hit the 1ghz cap. seems like your other 128MB graphic and 500MB ram is always sitting idle.
ur system is a mis match. get a new processor, everythng else is perfect.
oh for your problem, you system should also be well ventilated and strictly important if you have a mini tower.