Terrible screen tearing (All games + native windows)

Whenever something moves quickly (in games, strafing I can see it near wall edges, and I can actually see it just in windows when moving a window to the left and right on the edges) there is an awful screen tearing effect.

It splits like every 1cm into a different frame, then back again etc. Here are the things I have tried:

Changing from my 7600GT to my brothers 7900GT.
Using the VGA connector instead of DVI.
Rolling back drivers to a few older versions.
Using my older 17" LCD monitor.
Formatted/reinstalled multiple versions of nLited XP.
Turned on vsync in application settings, or forced on via drivers.
Enabled/disabled triple buffering in addition to vsync in the drivers.
Updated directX.
Got the newest drivers for my video card and motherboard.
Use older versions of directX.
Tested my ram fully with memtest86 v3.4

Here's a quick hardware list:
DDR2 667mhz 2gb
ECS Nforce4ma v3.0 mobo
7600gt BFG OC
Chimei 222d 22" widescreen
amd x2 64bit 3800+

Could it be that my motherboard's PCIe slot is faulty? There are no other display errors other than the weird screen tearing. What really baffles me is that it also happens on plain Windows edges, even with so many versions and monitors, video cards, etc.

I did install Fraps and made a movie of a short gameplay session where much tearing was seen in game, and the resulting video has absolutely NO tearing or ghosting or anything! It looks perfect. What could be the problem?