If you have an external drive that can be erased, you could try installing a new system there and setting the Mac to boot from it. That will determine if it is related to the current system installation, or if it is more likely to be a hardware problem. You can obviously also back up your data, erase your internal drive, and reinstall a new system there.
Alternately, as a test, you can just startup from your Mac OS X installation disc. At the first installer screen, go up to the menu bar. Under
Utilities, run Disk Utility. Move the Disk Utility window around the screen as needed to see of the same problem exists while booted from a different system. If it happens there, then it is more likely to be some odd hardware-related issue. If it does not, it is possible a fresh system installation will resolve the problem.