I've been providing Macintosh and Windows technical support, professionally, going all the way back to the 1980s. I've worked with hundreds of clients and have done an incredible amount of troubleshooting personal computers. I'm extremely careful, meticulous and thorough in my approach to problem solving.
That being said, I can't commend "marco...POLLO!" enough for having devised the ACTUAL SOLUTION to this problem. Way to go, Marco! CONGRATULATIONS!
Every person who has posted to this thread, in despair, should consider following his instructions TO THE LETTER! Half-___ed measures won't cut it! If it's done right, you should be able to achieve a rock-solid, renewed MacBook Pro.
The most important aspect of Marco's solution is that YOU MUST KILL THE CONTENTS OF THE PRAM BY DISCONNECTING THE BATTERY FOR A SUFFICIENT PERIOD OF TIME! "Zapping" the PRAM with an option-command-p-r at startup won't cut it! (I actually did ZAP the PRAM several times, just for good measure, to achieve the cleanest system possible.)
Also, Marco is exactly right, in that the older ATIRadeon resources MUST NOT BE ALLOWED TO INTERACT WITH THE SYSTEM once the PRAM has been canceled out. The older ATIRadeon resources somehow "pollute" the PRAM and cause the MBP to "misbehave" from that point forward.
The older ATIRadeon resources that I removed (in single-user mode) were dated 3 August 2009. The newer ones were installed by MacOS X Update 10.6.8 and are dated 7 June 2011. After I had a stable system, I tried putting the older ATIRadeon resources back in place, and the pixellation and overheating returned. I don't know what it is about the older resources that "pollute" the system, but they do seem to do that. Maybe they've been altered or corrupted by some unknown agent. (By the way, if you have trouble installing MacOS X Update 10.6.8, which I did, try using DiskUtility to repair the drive's catalog and permissions.)
I've been troubleshooting this jumbled, pixelated graphics problem for many weeks now on my MacBook Pro 1,1 and have tried all sorts of potential solutions. My MBP was becoming nearly unusable, and I was becoming more despairing, in spite of my great experience and confidence troubleshooting these types of problems. After carefully working with Marco's instructions, and even trying some variations on them, I now have a MacBook Pro that is running ROCK-SOLID, just like when it was new, with NO GRAPHICS ABNORMALITIES at all. The system even RUNS COOLER, to the point that I'm considering doing away with any fan control. Last night, I "Handbraked" a two-hour movie, and my MBP barely noticed! I think the temperature got up to about 145 degrees F, whereas last week it would run over 210 degrees F. Right now, it's running at 104 degrees F.
I may have more to say about this experience in the days to come, but let me finish my post with this opinion: IT IS MY BELIEF THAT THE "ACCEPTED" SOLUTION FOR THIS APPARENTLY WIDESPREAD PROBLEM, THE REPLACEMENT OF THE SYSTEM BOARD, IS SIMPLY AN EXPENSIVE WAY TO OBTAIN A PRAM THAT HAS BEEN COMPLETELY CANCELED OUT. That's why it works! The emptying of the PRAM is the key, folks!
Thank you, Marco!