the next thing I personally would do is replace the video card. Even before you mentioned the error message about the Radeon 9200SE not working properly you had stated - The monitor would also go black or get all scrambled up and then come back. That is a classic symptom of a faulty video card.
You didn't mention whether or not these things happened ONLY when the system had been running for a while or immediately on a cold start. If it is ONLY after the system has been running for a while it might only be that the GPU is overheating and a good heatsink and fan might take care of it BUT normally replacement is best.
OK, I have a compaq desktop, AMD Athlon XP 2.1GHz, 1GB RAM, XP home and the computer was running fine until Friday evening. All of a sudden when I clicked on the start menu, in classic mode, it wold take awhile for it to "fade in", about 5sec. longer than usual. And right clicking would do the same. The monitor would also go black or get all scrambled up and then come back. All drivers are up to date and all scans, virus/spywareetc.., came back negative. In all my frustrations I ended up using the system restore and starting over after resetting back to prior configurations failed. When I did this I got an error message for my video card, ATI Radeon 9200SE 128MB AGP, saying not working properly. When I install SP2 things improve with regards to error message and the start menu speed but the screen keeps going out for a second. When I install the updated driver back to square one. I have run directx utility, changed response time resolution etc... nothing works. Does any one have an idea??

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