Hello,
I'm experiencing this problem as well with my Geforce 8500 GT on a standard 
ubuntu hardy 8.04 with Compiz enabled. When cpu/gpu are loaded enough the 
monitor blinks and everything but the mouse (the cursor still can be moved) is 
locked hard: the system seems to be responsive and a ctrl+alt+del can exit 
session.
I've the "new" nvidia driver (169.12) installed through the envyng subsystem, 
I've tried to add the:

options nvidia_new NVreg_Mobile=1
NVreg_RegistryDwords="PerfLevelSrc=0x2222"

to the /etc/modprobe.d/options and  /etc/modprobe.d/nvidia-kernel-nkc
but the nvidia-settings still keeps telling me that Adaptive Clocking is
enabled and Performance Level is 0. Isn't this module option supposed to
DISABLE dynamic clocking and to raise to Performance Level 2?

Is there a way I can check that those options are effectively passed to
the module as soon as it's loaded into the kernel?

Thank you.

-- 
Occasional screen-wide "blink" when using opengl apps (compiz also) and Nvidia 
cards
https://bugs.launchpad.net/bugs/164589
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