system recovered from serious error, well, kind of….

I had a serious error message, temp\wer2b35.diroo\mini050909-02 and
tempwer2b35.diroo\sysdata.xmldmp.
I had symptoms of monitor gong black, graphics looked corrupted on desktop with spots on my cursor,occasional restarts.
I took the hardware acceleration down to none on display and the symptoms stopped. Reinstalled drivers from Nvidia and the same issues started again.

Has my Graphics card had a meltdown? (geforce 7600gs) Any help would be appreciated as I am about to do things like reformat incase it is a virus, buy a new graphics card or kick the whole thing into touch.
Thanks for any suggestions