yeah this really sounds like a faulty graphics card, especially since you see the issue in both Vista and Windows 7.
All the troubleshooting that Rain77 has provided was spot-on and really helped to clarify the issue, but after all that with no progress, and everything works in VGA mode with the driver disabled I would bet the problem is due to bad hardware.
Do you have another video card you can use to test with? Maybe find a store that has a good refund / return policy and get a new card and test. If you see the same problem just bring it back and look at a new motherboard at that point.
It's either the video card or the PCI-E / AGP slot that it's being inserted into that sounds to be bad.
I hope this helps.
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