I had a feeling it was my on-board graphics adapter of my machine, and it was. I popped in a graphics card, and problems solved. So I'm thinking it's my video BIOS needs updating, and that's probably your problem too (since I meant I was having LITERALLY the exact same problem. I could have taken the same screen-shot that you did). My machine is an older e-Machines PC, and probably doesn't have the best video adapter in the first place, and I KNOW the hardware is all out of date on it (I put it together as a PC to throw under the flat-screen TV so my family could just go online and stuff on the HDTV). So I suggest you update your graphics adapter's BIOS, and hopefully that will fix it for you. If you happen to have a spare video card around, try what I did. The one I put in was JUST as old as the computer, and was PCI even, but it worked (it was a Pinnacle card, and a pretty decent one for the time (which is a good 6 or 7 years ago), but I'm sure the on-board adapter for the e-Machines is bottom of the barrel).
Good luck and I hope this helps!