Lagging issues and red dots

New guy here (waves)
Anyway, I was just wondering if something this strange has happened to anyone else, and if anyone knows what might have been the problem?

So a few days ago, everything was fine on my computer. I had just finished 'Portal' for the first time, and then I decided to install 'Batman: Arkham Asylum'.
The installation was problem free, and the game launched successfully, but then it froze and crashed. After another attempt, it lagged horribly, video lost colour and became choppy.

Frustrated, I uninstalled the game, and proceeded back to playing Portal. Except everytime I tried to play it, about a minute into the game the screen froze and it got covered in red dots throughout.

So, I checked if any of my other games were affected, and sure enough, when I tried 'Company of Heroes', there was some slight lag, and when I did exit the game, my computer crashed.

So, I went out on a limb, and uninstalled Portal AND Steam, lo and behold, everything else was fine back to normal.

And it's not that the problematic games were too much for my computer to handle. I've played more recent games (Mass Effect 2, for example) with better graphics and such with no issues.

The only connection I saw was that the problematic games both relied on online software (Steam and Windows Live).

Any thoughts?
 
EDIT: Alright, so I spoke too soon. Turns out that my other games do indeed crash after playing them for 15 minutes or more...

So the computer said the following: "nv4_disp display driver has stopped working normally".
So that seems to be the problem.
 
If you haven't already done so, try uninstalling the old graphics driver from Add and Remove Programs (XP) or Programs and Features (Vista/W7) and not through the Device Manager and install the latest one.
 
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