Running ubuntu 11.10 with all the latest updates, latest NVIDIA drivers (304.64 - it has been happening on all drivers for more then a year now though), with an NVIDIA GeForce GT 240.
If I don't set powermizer to maximum performance after some time I will get a screen flicker with small colourful rectangles that most of the time will lead to a total system freeze. If I set it to maximum performance the system is extremely stable.
I've been looking for threads started by people with a similar problem for more then a year now but haven't found how to fix it. People claim it happens when powermizer changes it's mode. The GPU is not overheating, there's nothing wrong with the hardware.
I've tried running: sudo nvidia-smi -pm 1 in the terminal upon booting as suggested in one thread, but that doesn't help.