Ryanamur: it seems to be a problem particularly with the nVIDIA TNT2 card drivers. Do you have the latest drivers installed (the 6.50 drivers?) I would probably just recommend running it in 640 x 480 mode to get the clearest view...but you can try to upgrade your drivers and see if it works.
Being that you have the system you do (and now I'm envious...grrr!
) I doubt you have older drivers. Check anyway to see.
-Sazerac