I am compelled to post this so that folks not only know the causes but also the solution.
Looks like the BSOD problem has finally been put to rest after ATI released their new drivers which I downloaded and installed the moment they were available from IBM server. Its been a few days and was monitoring my machines behavior which is now a lot better and none of the problems associated with previous drivers have cropped up (there were few minor issues as well which I had not indicated on this thread). The system is now running very smoothly.
Hope it stays like this for good (at least till I have it)
Many thanks to everyone who participated on this thread with their valuable advise.
A great end to an oh so sorry issue.
I haven't had a single display issue since I've replaced my card and just used the 5.8 cat ATI drivers that came with it. Tempted not to upgrade unless there is a real reason that I have to.
Just wait....I'll go home later from work turn on my machine and I start to get the problems again. You just know it's gonna happen after saying what I've just said