No, never that bad....
This now sounds like it has more than "THE bug" going on and without being there, I'm lost to give you definitive information.
Can you get to Gateway's site and see if there are updated video drivers for your machine?
If so download them, go into Control Panel -> Device Manager find and Uninstall your video display.
Restart the computer (which will be freaking out badly) and let it reinstall the video drivers.
Restart again and then install the new drivers.
Once again... no promises but this does fix most display problems.
If that doesn't get it, I would strongly recommend you take advantage of Gateway's warantee program. I know it's a pain to be without your "baby" for a while, but in all truth you are entitled to a computer that works, that's what you paid for, and Gateway is obligated to provide it.