Strange Graphics Issues - Puzzled

Hello forum!

This is my first post and is a very troublesome topic.

I have a sager NP5797 with a clevo M570TU MB, Nvidia GeForce GTX 280M GPU, 4 GB RAM currently running Nvidia driver 266.58 for windows XP 32 bit(yes 32 bit atm for testing).

I have had the system for three years(almost) and have always kept it clean and free from overheating.

Right now I am facing a very troublesome issue-

Anytime I play any 3D game be it WoW, Oblivion(which I want to play atm), Skyrim, Modern Warfare 2, anything; I have problems.

In windows 7 thanks to the TDR the game would either just flat out crash or constantly recover the Nvidia display driver with error 4101 over and over and over and over again. This would start about 3-15 minutes into play or just randomly.

In windows xp - the game will just freeze and I can ctrl+alt+delete out of it and close it, eventually it will try to recover and I will see things like in this image (http://www.mediafire.com/?qr7d939rixbb6vo).

BUT nothing happens when I stress test the system. I have tried Furmark and fluid mark both with maximum settings with a burn in test on furmark there were minor artifacts but no freezing or crashing. I have tested the memory with memtest 86 and nothing is wrong, I have tried almost every driver on nvidia's/geforce's site. And nothing is wrong with directx tests.

So far I have gotten BSoD error 116 in windows 7, and in windows XP I have gotten:

Thread_stuck_in_Device_driver 0x100000ea parameter 1: 0x8a32ada8 and
kernel_mode_exception_not_handled 0x1000008e paramater 1:0xe0000001

Also just earlier I heard a shrill, vibrating, whistle coming from my PSU during a burn in, I don't know if that is normal or not.

Basically I am at a loss and I have an ongoing RMA that doesn't seem to be going anywhere.

Any sound advice would be very much appreciated, thank you.