Blue screen and big pixels

Hello everybody, I'm new to this forum and pretty much a true rookie regarding computers and therefore I'm asking you guys for assistance in helping me find a way to get my old Packard Bell running. The reason that I want my old computer up and running again is somply because I would like to try Linux and perhaps along that way get more knowledge of computers which I ultimately want.

*The Problem*

It all happend approximitely 2 years ago when I was browsing the web when all of a sudden I got a blue screen that said:
nv4_disp
The device driver got in an infinite loop.

Technical Information
*** STOP: 0x000000EA (0x8A1DA840, 0x8A26EB28, 0xB84FBCBC, 00000001)
Beginning physical dumping.
(I didn't copy everything, I only copied what I though was essentiel)

And everytime I start the computer it gets a different appearence, almost as if the pixels have gotten bigger. And as you pass the Windows-loadingscreen you can't see anything except white & black squares with big pixels all over the screen. And it just stays that way, you can't see your cursor, it stays that way untill the blue screen comes and shows what I wrote above.

I've tried many solutions.
First I tried to go into Safe Mode and uninstalling the driver for the graphic card and then reboot. Then everything is pretty much what it should look like, only that the pixels is alittle distorted. All I do then is go on the web and install the last driver for my graphic card and reboot. After that everything looks okey untill I try to load some programs(doesn't matter which one) and then the screen freezes, which you can only resolve by holding the power button and reboot. And after that you get the same problem as before.

The other thing I tried yesterday was using my MasterCD and reformat everything. It was a painful procedure but eventually I got it working. Everything was running smooth and I could even restart without having to face the big pixel-problem. Like I described before I wanted to try a new Operating System like linux, so I downloaded everything, burned it on a cd and made sure everything was there and then I rebooted. And as the pc was loading Ubuntu the screen just shuts down and never comes on, almost as if the monitor was shut down. And ofcoarse when I turned the computer on again the problem had reoccured.

System:
Microsoft
Media Center Edition
Version 2002
Service Pack 3
Graphic card: GeForce 8500 GT

I'm open for any suggestions that may be a solution to this problem and thankful fo any answers.

Best regards,
/Warzzarz