Maybe you've got a virus, or a corrupt video driver. Try re-installing your video driver, make sure the refresh rate is compatible with your monitor, and see if you can get to one of the free online virus scans, like Panda. Here's a link to the panda free scan:
http://www.pandasoftware.com/products/ActiveScan.htm?sitepanda=particulares)
Sounds like a driver/monitor problem, but it's worth a try rather than full nuke.
One more thought, although one you've probably tried already. Make sure you try a full power-down and restart, rather than just a restart, and let it rest for a minute before powering back up.
One more one more thought: Try running scandisk, here's the path:
Double-click My Computer
Highlight a local hard disk drive by clicking on it once.
Right click the highlighted local drive
Click properties
Click the tools tab and click check now to check the drive for errors.
The computer will need to restart in order to run scandisk in a safe mode.