Do you have an ATi card ?
My Radeon 5870 acted the same way with FGLRX installed.
Running Blender 2.49 in Window Mode solved the problem.
Also try deactivating the Desktop Hardware acceleration ( sorry forgot the name ) that makes windows wobble and such.
Hope this helps.
This problem occurs with enabled anti-aliasing. I also have an Nvidia Card and the same problem. Either deactivating anti-aliasing or the thing you did, helps.