I've heard of other people with 256MB cards having trouble, I wonder if that's the problem here. FYI: I picked up an 8800GT with 512mb for $60.00 on ebay and haven't had that problem since.

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System 1: Gigabyte GA-P35-DS4 MB with Intel e6750 Core 2 Duo w/8 GB RAM (Retail install)
GeForce 8800GT 512MB, Snow Leopard 10.6.2
System 2: Dell Optiplex GX280, Intel P4 3.0Ghz w/3GB RAM
GeForce 7800GTX 256 MB, Leopard 10.5.7 using iATKOS v.7 install (work in progress)