[Edi]

Atrocities, it might be the drivers after all. Nvidia does have something of a track record of fixing things that ain't broken and then something less than hilarity resulting from that. A driver upgrade completely borked my Freespace 2 install because they changed some OpenGL handling and it corrupted half the graphics. That was while running a 7900GT card.

Worst case, you need to go back two or three revisions of drivers until you find whatever non-broken thing they tried to fix working correctly. I have had a Core2Duo machine for two years and aside from that one Nvidia related problem, I have not had any problems with it. I recently bought a new monitor and an ATI HD4870 graphics card and no problems at all with WinXP SP3.

An overheating card is another possibility. I assume you have also cleaned out the computer case adequately? Dust clogging stuff can do nasty things.