See this for the Vista version of Add or Remove Programs:

Zolved - Why can't I find Add/Remove programs in Windows Vista?

Click NVIDIA then choose Display Drivers only if prompted to.

Then reload the driver after the reboot.

Hi jephree thanks for your quick reply, I did find the add or Remove Programs, but after that I got lost, can you explain again what do you mean by click NVIDIA and so on? Thank you very much

There should be an entry entitled: NVIDIA Drivers

If so click it and choose: Remove

If your computer has other NVIDIA drivers besides the Display it will prompt you: "Display Only ?"

If so choose: Yes: and remove the display drivers.


If your list does not list NVIDIA Drivers then disregard the above.



...

Thnx jephree, I did what you said to unistall the driver, but after I installed the new driver, it still contains the same problem what should I do? thanks!

Have you tried different resolutions?

Also were your desktop icons always arranged as in your screenshot?

I get the impression that your screen is being compressed.

Are all your display options set to default?

Have you checked the NVIDIA manager?

Have you checked any ASUS diagnostic tools?

Once again, thanks for your reply:

Well, I have tried restoring the computer to an ealier checkpoint and that didnt' work.

Well, the icons has been always the same, but sometimes I changed the resolution back and forth so the "buggy" graphics can be removed alittle bit for a while (cuz the "buggy" graphics gets more and more eventually). So whenever I changed the resolution, the icons do move.


Right now I just noticed something, I set my display to 16 bit color from 32 bit. and no more buggy images. but my orginal setting was 32 bit . So...now what might be the problem?
P.S. and could that still be hardware problem?

Still looks like a driver to me.

Again your screenshot looks to me like you are getting a "screen within a screen".

Just for "why not" go to NVIDIA and try the option of Automatically select driver: Option 2:

Drivers - Download NVIDIA Drivers

Oh I did that, but nvidia doesnt' provide my driver itself, it tells me to go to ASUS website for driver download. Look:

Product Current
Installed Driver Recommended
Driver
NVIDIA GeForce Go 7700 97.54 ASUS requires that you download the driver for your GPU from their support site.
You can find more information at: ASUSTeK Computer.

The GeForce M series and GeForce Go series notebook GPUs use drivers that have been customized by the notebook manufacturers to support hot key functions, power management functions, lid close and suspend/resume behavior. NVIDIA has worked with some notebook manufacturers to provide notebook-specific driver updates, however, most notebook driver updates must come from the notebook manufacturer. Additionally, the desktop GeForce graphics drivers will not install on Geforce M series and Quadro M series notebook GPU's.


and the driver I am using right now is the one I downloaded from ASUS :/

To test hardware try an external monitor.

The fn/F7 and fn/F8 hotkeys directly apply to your screen display.

Page 27 of the manual: http://dlcdnet.asus.com/pub/ASUS/nb/G1/e2808_g1.pdf


At some point you might consider running a Repair Install of Vista.

Alright...So...no other drivers other than ASUS are there right... =/ damn!