Let me start off by saying this is my parents laptop. I don't know the exact problems they were having before. I know when I took the laptop there were blue screens and the computer was stuck on some kind of cycle trying to repair itself. I didn't see the error codes. I had told them some time ago that the computer should be wiped since I had repaired it before.
So I went in with Hiren's boot CD and got what I could off the hard drive. I tested the RAM using a diagnostic tool and it came out ok. Opened up the computer and cleaned the heatsink and reapplied thermal paste. It was filthy, Closed it back up and repartitioned and reinstalled Vista 32bit using the recovery partition. Had some issues finishing the Windows setup but got through it. A few minutes being on the desktop and the screen goes black with red striations with a white patch where the mouse was. Couldn't do anything. The laptop restarted itself after about a minute. Booted into safe mode and did a disk scan on all the partitions. Came out ok. Went into MSCONFIG and turned off most services and start up programs hoping it was a conflict. Restarted and a few minutes longer this time on the desktop and the same thing happened. I posted a scan on malware removal forum and they didn't see any indication of malware so sent me here and said it may be a display driver issue. In safe mode I updated the display driver from NVIDIA's site and rebooted. The problem became worse and it didn't even get to the logon screen. Booted back into safe mode and rolled back the driver and tried rebooting again into normal mode. Same issue. Few minutes on desktop and the screen goes screwy. I opened the laptop up again and checked the connections. Booted again and no dice. Booted into safe mode again and went into Device Manager and disabled the display adapter NVIDIA GeForce 8400M GS. Rebooted into normal mode and no problems now!
I'm currently in normal mode, display adapter is disabled. My parents will have no issues running the computer like this as it will be fine for all their basic needs. I am still perplexed as to why it takes several minutes for the screen to get messed up when in normal mode. I'm still hopeful this is a software issue and not hardware. Any suggestions would be appreciated. I've attached two pictures of what the screen looks like.