Boot issues and video issue (definitely related)

[Vode]

Last few days I've been having trouble booting, it's been freezing sometime during when it's powering up devices, all fans have been spun up at this point (including GPU) and hard drives seem active, but it just stops.

Takes me ~5 goes with no real trick before I can get it to boot. Once it's booted it's been fine, until I got home today after leaving it on since the morning to find this:
http://i92.photobucket.com/albums/l24/VodeAndreas/Pattern.jpg
This pattern is on top of everything except the cursor, and appears different on each window.

The last few days when I've turned it on after this occuring I've left it on all day and it's been behaving normally for general usage, office usage and gaming.

I'm planning an upgrade to most likely a i7 system next month, so if I'm totally stuffed not a huge deal but not sure what's causing this issue.

My friend suggests my power supply, I've checked my voltages with my DMM and they're perfect though.

I was thinking motherboard until I got this odd pattern, which now makes me think GPU instead.

Help please

EDIT:
Temperatures are fine, only new hardware is a new monitor which is working fine from a second computer, I've checked connections already, and issue occurs on both monitors that are connected.

 

[Dangman]

That's a GPU related problem. Those are artifacts.

[Testing the GPU]
Use Furmark or ATI Tool to stress test the GPU. If you see any artifacts, the GPU could be overheating, too overclocked, or faulty.

So it might be time to RMA.

 

[Vode]

It's a XFX 8800GTS 640MB that I got within a week of launch... Not sure if it's still within warranty. I'll check on that.

Other hardware by the way is:
Athlon X2 4200+
ASUS A8N-SLI Premium (nForce 4, Socket 939)
Antec NeoHE 500W
4x1GB of DDR400

CPU was on a 10% overclock until starting having odd boot issues then was all set back to auto.

Graphics card is all on default settings.

 

[Dangman]

It's a XFX 8800GTS 640MB that I got within a week of launch... Not sure if it's still within warranty. I'll check on that.

I think XFX requires you to register the card in order to get lifetime warranty. So if you registered it, it should still be under warranty.

 

[Vode]

Unfortunately for me I'm in Australia, and from a look around the XFX site I found what I believe to be the relevant warranty length for a 8 series card in Australia:

WARRANTY PERIOD: XFX warranties hardware Product for a period of two (2) years.

So from Dec 2006 purchase I guess I'm out of luck.
Might contact them online anyway see what they say.

 

[Vode]

Bumping this to ask:

I've bought myself a 260 GTX as a replacement for the 8800GTS
(XFX replied confirming no warranty coverage on it)

However, the desktop doesn't seem to be POSTing every time with no GPU in it, when it does it gives me a audio warning of no VGA output or something like that, but it still doesn't reach this point every time.

Assuming that there may be another fault in the motherboard or PSU, is it possible to damage this new card if I install it now?

Should I just restrain myself and go without a desktop for a couple of weeks?