XFX NVIDIA GeForce GT 240 Issues

I recently bought an XFX NVIDIA GeForce GT 240 DDR3 512MB graphics card from eBay for £36. I was on a tight budget and only wanted to play games such as Half Life 2, Battlefield 2, Battlefield 2142, COD 4 etc.

Ever since installing the graphics card with the latest drivers on Windows 7 Ultimate 32bit Service Pack 1, I've been getting these strange in game glitches. Where everything turns from 3D into 2D and these strange pixels appear on the screen.

Here's a screenshot I took of the Half Life 2 menu screen (Big Image) - http://i.minus.com/iomIf580qzdtj.bmp

After a while the game will either stay the same or crash to the desktop, every setting on the game is maxed out, 16X AA, max resolution etc.

When it exits back to the desktop, every so often these strange pixels appear in different places all over the screen.

Here's my full system specifications, including hardware and peripherals...

Processor - AMD Athlon 64 X2 Dual-Core 3800+ 2.10GHz (Not Overclocked)
Graphics Card - XFX NVIDIA GeForce GT 240 512MB DDR3 (Version 285.58 Driver)
Motherboard - ASRock N68C-S UCC (BIOS Version 1.60)
RAM - 2GB (2 X 1GB) DDR3 677MHz (Unbranded)
Hard Drive - Seagate 160GB SATA
DVD Drive - LG DVD R/W Ultra Speed
PSU - Alpine 500W
Monitor - Hanns G HX191D 19" (DVI Cable)
Keyboard - Compaq PS/2 Wired
Mouse - Labtec USB

Windows has the latest updates, I have Avast Internet Security 2012, Google Chrome for browser.

These are the latest drivers
http://www.geforce.com/Drivers/Results/38915

Latest Beta drivers
http://www.geforce.com/Drivers/Results/41049

@-jonez Already tried the latest and beta drivers, no joy.

@Thently I haven't overclocked anything, the GPU temperatures are find.

It happens with all games, some worse than others, I just suspect that my PSU isn't that good and isn't giving the motherboard enough amps on the 12V rail.

Try using less aggressive display settings.
16XAA is ridiculous btw.
The GT 240 isn't exactly a powerhouse.
It will perform just fine if you back off the AA.
I play those games and have never used those settings.
I have a 5850 btw.