Have you recently updated the display driver? My CW1 worked absolutely fine until I used the Vaio Update, and installed the Nvidia Graphics driver 8.17.12.5957. Once I had done that it started displaying exactly the same signs that you are describing (although I have to say that I can't rememebr the kernal mode driver number that was displayed). I restored my machine to factory settings, and kept the original graphics driver instead of updating it. Ever since then the problem has gone away, and the machine works as it used to ie faultless.

Hi colsay, youll be glad to hear that is more than likely only a driver problem rather than the dreaded nvidia one that you have read so much about  

You can get the original drivers from the vaio support site, so you could try uninstalling the driver and re-installing either the original or the updated one. There are instructions on how to do it here - http://technet.microsoft.com/en-us/library/cc725782.aspx 

II just hope the site offers the exact driver for the exact Vaio model. Sometimes, the older your laptop, the fewer drivers available.