Hey, I have been having a problem very simliar to this on my PC recently.
I was having problems playing "Ultimate Spiderman" (what can I say I like wearing tights!), so had to update my drivers which included my graphics drivers, but I think the driver that the game needed was in fact a sound driver for my onboard Realtect AC97. Anyway...
I have a Radeon 9800 Pro AGP ATI card. On the ATI boards I think problem is often referred to as a "ati2dvag.dll" loop. This ati2dvag.dll is a display driver.
Anyway, I know you have a Geforce card, but I'd guess it's having this problem. The link below is the only working fix I've currently found for it.
See what the user named "cobrakaun" suggests. I followed their advice last night after, using registry & driver cleaners to no avail but this fix worked.
http://www.abxzone.com/forums/showthread.php?t=28206
I know it's not the ultimate in repair because it diverts the problem because you need to make a change to the setup to work around it, but it does at least let you use your PC without crashes (so far it has for me).
It'll give you time to investigate why this "fix" works. That's what I'm doing now as I found your thread. On the properties of my card since doing this fix it has turned off the AGP acceleration but I haven't noticed any difference in speed on Pro Evo 5 or Flight Sim 2004, so if it is affected, it's very minimal.
Good luck.
