The monitor is definitely not the problem. I took my CPU at a friend's place and everything looked the same. It's not a software problem as well, because it happens in Fedora Linux as well as Windows 7.
What's wrong? Is something off with my graphics card? Hardware-wise?
It looks like your graphics card has opted for early retirement. Does it happen right away, or when it has been on for a while? If the former, it's basically done, although you may be able to underclock it and clear up the problem at least temporarily. If the latter, it may be overheating. Clean all the dust out of its heatsink and see if that helps.