If it is a physical card, inspect it for damage. I've seen about 50 cards from the Zotac 8400 and 8500 lineups do this. Your symptoms are the same as what I would notice. When investigating, there were always popped caps on the video card.
My GPU does the same thing but it is an old 7800GT and I'm positive it is failing. The processor you have was released ~4 years ago, so depending on when you bought it it may just be failing. Have you checked the temperatures?
If it used to work in Win 7, but now it isn't then I'd suspect hardware failure. If it worked in XP but doesn't work after an upgrade to 7, then I'd suspect driver issues.
My 6950 will do the same thing if I O.C. it to far. From monitoring it, I can say it is a heat issue. Open your case and inspect for accumulated dust and dirt. I bet you find things improve when good air flow is restored.
I had this message with my Asus GTX580. I keep it set at the factory settings but monitor the status for the card, when the error occurred I noticed that the temp had spiked 30 degrees C and that the fan had stopped for about a second before jumping to full speed. This didn't happen until the 285.38 drivers came out.