I wonder if the garbage showed on your screen is due to harddrive failure. I've been having the same issue for some time and I found that using recent ATi drivers on my somewhat older ATi card (Radeon 9700) caused these problems. After going back to older drivers, that issue was gone. I don't know if that applies to you as well, but it might be worth the check.
@rdgrimes: AFAIK, the 160Gb drives of IBM (Hitachi) nowadays don't suffer from the high dropout count as the older series as the 60GXP etc? Or am I wrong?