I too get this error and it is extremely annoying because I cannot run any video files using CUDA acceleration on my nVidia card or play any games. The following is my diagnostics and I this is still currently occuring on my system.
System Specs:
Windows 7 Professional 32bit Edition
4GB RAM
nVidia GTX 1GB 460x2
nVidia Display Drivers 258.96 (WHQL)
nVidia Display Drivers 260.63 Beta
Intel i5-760
This initially began, after everything was running smoothly for at least a month is when I used CoreAVC Professional Edition 2.0 to utilize CUDA hardware acceleration for viewing video files. Everything previously was working fine and I was able to view video playback. However, this time the screen came up with a matrix like screen and froze as a result. The error then occured as per the thread title but with the nVidia drivers I was running (258.96 WHQL). From then onwards I was not able to run any video playback that required CUDA hardware acceleration and the games I was not able to play because of massive artifacts everywhere which also resulted in the game freezing and the error message occurring.
1. I've checked my CPU and GPU temperatures during this occuring and nothing out of the ordinary happens besides temperature rising because of usage. Does not go above the 75 degrees.
2. I should have enough power for SLI as it is a 750W PSU specifically designed for SLI (nVidia certified product)
3. Attempting to uninstall the drivers as I thought initially it was a driver problem was not the reason as I was not able to uninstall them because every attempt to would result in the screen turning black
4. Uninstalling CoreAVC Professional Edition 2.0 did not work because the artifacts and problems still occured while trying to game
5. After formatting my PC (yes because it was that bad) from scratch, everything worked fine again (until recently - it has been fine for 2 weeks until just today)
6. Setting the system restore point to 4 days previously did not resolve the problem
7. Uninstalling the drivers finally via a different program as opposed to the Control Panel and installing more newer drivers (despite being Beta) did not work
8. Reinstalling Windows 7 over the old one to repair it did not work
So there looks like something conflicts with the system that causes the drivers to fail and as I cannot see it as a hardware failure due to being able to format my PC and everything running smoothly, along with no rise in temperature as one would expect.
If you have any other ideas, it would be much appreciated as even though above you mention it is hardware related, I'm not sure if this is the case.
Thanks!