Display driver keeps crashing on the computer and receive error message "Display driver NVIDIA Windows Kernel Mode Driver Version 306.97 has stopped working and recovered".

The problem seems to have disappeared on my system.  The several notable things I did were to update the flash player (also to correct several other problems), double check my directx files (including installing the older version of directx which my graphics card says it was designed for), and to turn the settings on the game I experienced the issue with from "good" down to "fair" even though the computer can easily handle the higher graphics.  The problem hasn't resurfaced in so long I had almost forgotten about it.  I do have to say though that flash seemed to have been giving me fits for a while, and that is the thing I can recall updating.  I did not touch the drivers at all.

Try this

Problem: a thing called TDR checker monitors the computers hardware, particularly the GPU, is say the GPU stops responding with the computer for 2 seconds TDR checker restarts the driver. The TDR checker was good on paper but did not work in the real world. as a gpu can stop responding when it is working hard.

Issue since the time of vista, thats why this problem virually never happened on XP

Here is the solution

Exit all Windows based programs.

Click Start, type regedit in the Search box, and then double-click regedit.exe from the results above. If you are prompted for an administrator password or confirmation, type the password or provide confirmation.

Browse to and then click the following registry subkey:

HKEY_LOCAL_MACHINE\SYSTEM\ControlSet002 (sometimes called ControlSet001) \Control\GraphicsDrivers

On the Edit menu, click New, and then select the following registry value from the drop-down menu specific to your version of Windows (32 bit, or 64 bit):

For 32 bit Windows

Select DWORD (32-bit) value.

Type TdrDelay as the Name and click Enter.

Double-click TdrDelay and add 8 for the Value data and click OK.

For 64 bit Windows 

Select QWORD (64-bit) value.

Type TdrDelay as the Name and click Enter.

Double-click TdrDelay and add 8 for the Value data and clickOK.

Close the registry editor and then restart your computer for the changes to take affect.

This puts a delay on the tdr checker of 8 seconds thus the gpu can stop responding for 10 seconds, usually this fixes the problem, if you are still suffering from this issue (after updates or a reinstall of drivers, you know all that annoying driver stuff)

Then do this, do the same thing but instead of "TdrDelay" type "TdrLevel" enter the data value as 0 (it is set to that natively, but double check) then delete the TdrDelay, 

Restart 

That completely turns off Tdr checker, so now windows 7/vista/8 now works more like windows XP

Share the info XD

listen here micro soft i have a lap top that since brand new it has done the same thing and it is just about pissed me off some one has to take responseablity for this problem i paid $2,500 for a problem microsoft or nvidia need to pull there finger out of there **** and fix it mine has been doing it for 2 year now and it doesnt matter what driver you put on it or how you install and uninstall it it is the same it need to be fix you contact nvidia and they say it is a windows problem you contact microsoft and they say it is the manufatures problem you ring the manufature and the say take it to a place where you have to pay to fix something that has been there from the start come on microsoft instead of bring out a new operating system every 2 years fix the ones that are out there first all you think of is money well i have had a gut full there are hundreds of people with the same problem so **** fix it

Try using OPERA as your web browser,worked for me.

or

Untick the "use software rendering instead of GPU rendering" box in INTERNET EXPLORER/TOOLS/INTERNET OPTIONS/ADVANCED.