I'd suspect that there's a minor corruption in your video driver that's causing the problem. Minor corruptions are fairly common - and they don't change the version number - so even having the latest driver is no assurance that it's working properly.
As background, in the old days (a year or two ago) it was necessary to use a tool to remove all components of an nVidia driver in order to get it fully updated. Back then there were 3 steps to troubleshooting this problem:
- just plain updating the driver
- uninstalling the driver, then updating it
- using a removal tool, then updating the driver.
So, the next step would be to remove the nVidia driver using the Control Panel...Programs applet.
Then reboot the system - if it tries to reinstall your video card, cancel out of the installation.
Then double click on the latest version that you downloaded and install that.
If this still doesn't fix it, then try the procedure here (under the Old Driver Removal section):
http://www.tweakguides.com/NVFORCE_3.html
Just FYI - this is assuming that the video drivers are the issue. Should there be another problem (such as malware, Windows corruption, bad hardware, etc) then the fix probably won't work. But you'll have ruled out the drivers as an issue, so you can move on to further troubleshooting.