I havent seen a virus like this before.
Id be more inclined to say looking at the photo's its more a case of corrupt graphics memory.
But first of all, check the following:
- the monitor cable - remove it from the graphics card, and then plug it in again, making sure its secure. Also, check for any bad bends in it. DO THIS WHEN THE PC IS OFF AT THE WALL - as removing it when its on can cause ESD (im protecting myself here).
- go into safe mode - press F8 just before windows loads up. Then choose safe mode, if its the drivers that are corrupt then it should work fine. Also try enable VGA mode.
- Check the graphics card itself - if you are confident enough, open up the computer and check that the graphics card is seated correctly in the PCI/AGP slot. If its AGP revision 2 onwards, check the clip at the end of the slot hasnt become loose. AGAIN DO THIS WITH THE PC TURNED OFF AT THE WALL.
If it works in safe mode/enable VGA mode, get the latest ForceWare drivers from http://www.nvidia.com/object/win9x_81.98.html
See if any of that helps. I have a feeling if none of them work, its corrupt graphics memory.