Horizontal Lines appear in random spots on display

Hey everyone.

Recently, my white iMac has been locking up a lot lately (forcing me to hard-reset, boo) and horizontal lines have been appearing. It freezes most often during more graphically-intense applications like games and Pro Tools. It's not the regular Mac freeze, where the grey dialogue box politely and multi-ligual-ly informs you that you need to reset. When my computer freezes, things just lock up, or the screen will go black.

I thought since I had not done a whole lot of computer maintenance since I bought it, there was a possibility it was just a horrible software glitch.

So I zero'd my hard drive and reformatted. Almost immediately the lines returned. Interestingly enough, I don't need a digital camera because these awful lines can get captured by screenshots.

The lines are typically pinkish or black, but if you look close, the individual pixels in the lines seem to be coloured arbitrarily. If the lines appear on a window, I can drag it around and the lines will follow. If I resize the window, the lines disappear.

Here's a screenshot. Note how the lines only affect the one window, and do not span the entire screen.
http://img161.imagevenue.com/img.php?image=29918lines_122708lo.jpg

These lines aren't bound to a particular window, just the desktop as a whole.
http://img142.imagevenue.com/img.php?image=45631lines2_1221119lo.jpg



How are these things getting captured on screenshot if I just reformatted my computer?
If it's not a software error, could a worn-out graphics card produce odd artifacts that are screen-capture-able? Apple ships hardware that can't last 2 years? Am I going to get shafted if I try to call them? Is there possibly a fix for this?

Thank you everyone for taking the time to read my post, and thanks in advance if you have some advice or want to express that you share the same issues.