Probs with HTPC Display going haywire under CPU demand

Difficult to capture the issue in the subject heading.

My 50" Plasma runs fine when I dont demand anything of the CPU. Recording digital to Hard Disk - no probs.
Previously I used to also be able do some more demanding multi tasking jobs, like re-encode a video at the same time as watching TV or maybe even watch a DVD movie in PowerDVD whilst we record something from Free to Air in my Digital TV software (in minimise/background).

.....not any more......

It's only started in the last 3 months of this HTPC's 2 year life, but now when I do these thing secondary things the screen begins to flicker and then 80px (guess) wide artefacts and stripes begin to appear on the monitor.
These get worse over the ensuing 10-20seconds until you cant see anything but stripes......then the sound inherets a screeching sound and the PC ultimately crashes.

The artefacts/problems dont start immediately, rather 1-5minutes into the operation of the secondary app starting to play/encode.

You can prevent it from going all the way to crash by simply ceasing the secondary operation (cancel watching movie or encoding vid). However the screen can retain a funny blocky mouse artefact for some time afterwards.

If you catch it quick enough and stop the secondary ops in time (whilst you can still see/find the app. behind the blocky/stripeness), some of the artefacts (only streaky at the early stages) remain but can be removed by alt-tabing through some applications and the associated screen refresh clears them.....

tried rbooting etc...no go....comes back.

Although it may not be related, this morning it did give a message...failed on VPU or something....but may not be directly related...maybe rather a consequnce.

Any ideas?

System spec
Radeon9800Pro+2.8GHzP4 with 512MB DDR400, 350WPS with about 6 Hard disks of varying sizes=2000GB.

Note: this system config has been working fine as is for 2years up until 3 months ago. Last change was an additional HD in Dec06.