Question about a MacBook Pro screen and startup failure

It's been 3 to 4 months now that my MacBook Pro has continually failed to start up.
Whenever I power it up, the regular gray booting screen comes up, albeit slashed as shown in this picture : http://i43.tinypic.com/birr74.jpg

It then goes on to the blue screen which usually precedes the OSX login panel, although not showing up the aforesaid window (despite letting it "boot" for a good 2 or 3 hours).

On a side note, the computer is a 2006 MacBook Pro, 2.16 GHz Intel Core Duo, mounted with a 80GB HD. I recently, meaning a few months prior to the laptop crashing, upgraded the RAM from 667 MHz to 1.66 GHz.

I have tried starting the computer in Target Mode and plugging it to my iMac, erasing the laptop hard drive from there and reinstalling OSX on it.
This seemed to go fine at first (the screen was perfectly unstripped) until it suddendly froze and the lines came back.
Also, there currently isn't any operating system installed on it, hence the little folder icon at the center of the screen on the picture I uploaded.

Would anyone have any idea as to what might be wrong with the computer ?

Thanks in advance for your help!