have you tried unlocking the ATi Overdrive options in the CCC, forcing a lower clock see what happens.
The obvious thing here is something is causing the gpu load, which is interfering with everything else. Perfectly possible its a faulty card, could be the mobo drivers as its a rather odd board setup, with 2 nvidia chips onboard also. Is there anyway to install only intel drivers and only use a slot connected to the Intel northbridge, would that only stop you using the slots connected to the nvidia chips, or would the board simply not work.
Not quite sure why you're using that mobo, are you using multiple Nvidia cards for other workload, or is it just a storage system, aren't there far far far cheaper and easier ways to add a raid 5 setup of slowish drives?
Looking at a pic of the board its got a huge plate/heatsink thing going on, any chance its shorting out on the long card somewhere? Also I'd take the card out have a look at the pci-e connector, look for any damage there.
I'd try a fresh windows install, with basically only the ATi driver, do custom, don't install the audio driver, just CCC and display driver, see what happens.
EDIT:- for vista/win 7 also turn off aero, and try vid playback without hardware acceleration, try something like VLC, see how it does.