Studio 1735 ATI Radeon HD 3650 - "Flashing" display with 3D video games.

Running Vista 32-bit.  I play few video games.  Mostly puzzle games like Bejeweled Twist, Cubis, 7 Wonders, 10 Talismans, etc.  (Not WOW or other resource intensive games.)  Anything with 3D graphics causes my display to go haywire.  White flashes everywhere, various speeds (Flickering?  More than just flickering!).  Sometimes if I select to play with display not at 'full screen', the flashing is minimal, but may still be there occasionally  One new game I installed (World of Goo) is like watching a strobe light.  It makes my eyes hurt -- can't play it at all because of this.

I've tried updating drivers at Dell.  (Actually, I'm suspicious that this started with the last update of drivers dated in July of this year, but can't be sure.)  I've uninstalled drivers and re-installed previous versions.  I've installed drivers from ATI site.  I've turned off Vista Aero on my display.  Nothing seems to help.

Is it my video card?  Is it the drivers?  I've got a couple of games that used to be OK and now don't seem to be (hence, my suspicion of the most recent driver updates in July.)  I read post here mentioned downloading drivers from ATI and using a modded Catalyst (or something like that).  Haven't tried doing that yet.

Do I need a new system board?  My system is almost 1 year old.  I've got an extended warranty, and have gone through on-line troubleshooting with Dell on-line help.  Not very much help.  Had me doing stuff I had already done. 

Help!!