At 6 years old plus, and the description, my bet is that the monitor is failing. Try this. Set it to 640x480 and see if that's bad too.
The real test is that monitor on another PC.
The past week I have noticed my montor will flicker and then make all my windows have this huge distorted look similar to a "pulled taffy" wide effect. Sometimes it will flicker back to normal 800x600 but lately it has been staying stuck at that wide window look. I have tried the manual controls, doing a windows update and applying 800x600 again in Control Panel but nothing brings permanent solutions.
Before I shell out $$ for a new monitor (which comes at a bad time after spending $ on textbooks.) Is there something I am overlooking or is it time to chuck it? I have a 6 year old Comp USA 17" CRT. My destop is brand new, almost a year old.