Strange Flickering/SloMo Troubles

So I have been having this trouble for a while but it has become significantly worse lately as I have been trying to upgrade drivers for my Mobility Radeon x1600 on windows 7.
First off my PC is a HP nx9420 business notebook with a Intel Core 2 Duo duel core T2500 @ 2GHz and 4Mb of ram and the above mentioned ATI Mobility Radeon X1600.
The problem is that when I run any type of graphical program, like a game or a computer generated video, my screen will flash for a half second and the program will go into a ;slo-mo; like mode where everything runs super slow.
It will flash again after about 8 seconds and return to normal for another few seconds then flash again to the ;slo-mo; and back again and it will continue this way indefinitely unless the game is a very graphically demanding one at which time it will just reboot the computer.
It is doing it right now as I am typing this because I have CCC open in the background with the little 3D video running.
I was under the impression that the trouble was with the graphics card drivers and the fact that the card is not supported on windows 7, however I was able to successfully apply the 9-11 legacy drivers where as before the system just used the ;windows compatibility drivers;.
But I am clueless what the problem could be now.
Is the graphics card bad or going bad? Would some other piece of hardware be causing this? Any ideas from you all would be much appreciated.
Thanks.