It looks like a video card driver issue, but its hard to tell from here.
if your not sure, try a diagnostic program that determines what might be faulty.
It kinda looks video related.
shut down the machine, re slot the video card in case its a little wonky.
visit the manufacturers site and re install the drivers or update the drivers or roll back the drivers.
did you remove the older drivers or just upgrade over the top?
is it happening on two monitors?
are you only using one?
what port are you using?VGA DVI etc..
what motherboard do you have?
I have a 9800 in this machine but for OSX
my current usage
ATI Radeon 9800 XT:
Chipset Model: ATY,R360
Type: Display
Bus: AGP
Slot: SLOT-1
VRAM (Total): 256 MB
Vendor: ATI (0x1002)
Device ID: 0x4e48
Revision ID: 0x0000
ROM Revision: 113-A14404-123
Displays:
910B:
Resolution: 1280 x 1024 @ 90 Hz
Depth: 32-bit Color
Core Image: Supported
Main Display: Yes
Mirror: Off
Online: Yes
Quartz Extreme: Supported
Rotation: Supported
L70N:
Resolution: 1280 x 1024 @ 75 Hz
Depth: 32-bit Color
Core Image: Supported
Mirror: Off
Online: Yes
Quartz Extreme: Supported
Rotation: Supported
this forum link has some other basics you should try.
http://www.techspot.com/vb/topic16552.html