Something is definitely up, but it is a bit odd that the appropriate drivers won't work, but the generic Windows ones do...
What brand is it? Have you tried downloading the nVidia drivers from them and installing them? If not, I would give that a go.
Here are some specific drivers depending on what Windows version you use: http://www.pcpitstop.com/drivers/download/NVIDIA
Here is one for 64bit for Vista and up:http://driverscollection.com/?H=GeForce%20GTS%20450
If you have any old nVidia driver versions, or can find any, I would try those. In reality, they newest ones should work. But considering the circumstances, it's worth trying a few.
Worst case scenario, do like sumitd said and RMA if you can. If not, you may be stuck with the generic drivers which is no good. If it has been having problems in the past there is a good chance of hardware fault.