Recurring Kernel Panic on Macbook pro - need help if possible(log inside)

Hi all. This issue just started a couple of days ago. I noticed something weird happening when i watching a YouTube video - the video stopped playing but the sound kept on going like nothing was wrong. Anyway i ran the Apple Hardware Test yet it detected no problems. I even went through the extended test just to make sure. I originally got this machine as Snow Leopard but upgrading to Lion. Below the error log of course will show you all the specs about the system. Is there anything here that sticks out about what could be the problem?

Basically what happens is the whole screen freezes and i reboot and i am able to go about its business until the next freeze. The times that I have came back into the room to see it froze up was when the screensaver had turned on or when i was playing any kind of game it seems like it had frozen up(one time playing a game in VMWARE (windows xp). I dont know if this could be a GPU issue or not.

Thanks

Fri Apr 13 22:11:01 2012

panic(cpu 1 caller 0xffffff7f80a45907): NVRM[0/1:0:0]: Read Error 0x00003250: CFG 0xffffffff 0xffffffff 0xffffffff, BAR0 0xd2000000 0xffffff8080f55000 0x084700a2, D0, P2/4

Backtrace (CPU 1), Frame : Return Address

0xffffff807f6a36a0 : 0xffffff8000220702

0xffffff807f6a3720 : 0xffffff7f80a45907

0xffffff807f6a37b0 : 0xffffff7f80db1c76

0xffffff807f6a37f0 : 0xffffff7f80d9216b

0xffffff807f6a3830 : 0xffffff7f80d9599f

0xffffff807f6a3980 : 0xffffff7f80b23ef6

0xffffff807f6a39c0 : 0xffffff7f80ba3662

0xffffff807f6a3aa0 : 0xffffff7f80ba4b29

0xffffff807f6a3b90 : 0xffffff7f80dc6f40

0xffffff807f6a3cf0 : 0xffffff7f80dd7929

0xffffff807f6a3e10 : 0xffffff7f80b54bad

0xffffff807f6a3e40 : 0xffffff7f80a4f282

0xffffff807f6a3ef0 : 0xffffff8000639946

0xffffff807f6a3f30 : 0xffffff80006386c0

0xffffff807f6a3f70 : 0xffffff8000638564

0xffffff807f6a3fb0 : 0xffffff8000820057

Kernel Extensions in backtrace:

com.apple.NVDAResman(7.1.8)[

94BA87BA-B128-3310-9860-98EC67AB7FAF]@0xffffff7f809e5000->0xffffff7f80cbefff
dependency: com.apple.iokit.IOPCIFamily(2.6.8)[F63D4ABE-42DA-33EF-BADD-3415B0CB0179]@0xffff ff7f80815000
dependency: com.apple.iokit.IONDRVSupport(2.3.2)[4B3F84DC-18B3-3897-BC56-4E3940878047]@0xff ffff7f809d3000
dependency: com.apple.iokit.IOGraphicsFamily(2.3.2)[FE536983-1897-3D6B-965E-24B5A67080DA]@0 xffffff7f8099b000
com.apple.nvidia.nv50hal(7.1.8)[7596DB8C-AE9D-3C87-B11A-0ED8F940CAF8]@0xffffff7 f80cbf000->0xffffff7f80fe0fff
dependency: com.apple.NVDAResman(7.1.8)[94BA87BA-B128-3310-9860-98EC67AB7FAF]@0xffffff7f809 e5000

BSD process name corresponding to current thread: kernel_task

Mac OS version:
11D50b

Kernel version:
Darwin Kernel Version 11.3.0: Thu Jan 12 18:47:41 PST 2012; root:xnu-1699.24.23~1/RELEASE_X86_64
Kernel UUID: 7B6546C7-70E8-3ED8-A6C3-C927E4D3D0D6
System model name: MacBookPro4,1 (Mac-F42C86C8)

System uptime in nanoseconds: 737090168639
last loaded kext at 38296273365: com.apple.driver.AppleHWSensor 1.9.4d0 (addr 0xffffff7f81d26000, size 28672)
last unloaded kext at 137172974840: com.apple.iokit.IOSCSIBlockCommandsDevice 3.0.3 (addr 0xffffff7f80882000, size 86016)
loaded kexts:
com.vmware.kext.vmnet 3.1.4
com.vmware.kext.vmioplug 3.1.4
com.vmware.kext.vmci 3.1.4
com.vmware.kext.vmx86 3.1.4
com.apple.driver.AppleHWSensor 1.9.4d0
com.apple.filesystems.autofs 3.0
com.apple.driver.AppleUpstreamUserClient 3.5.9
com.apple.driver.AppleMCCSControl 1.0.26
com.apple.driver.AppleHDA 2.1.7f9
com.apple.driver.AudioAUUC 1.59
com.apple.GeForce 7.1.8
com.apple.driver.SMCMotionSensor 3.0.1d2
com.apple.iokit.IOUserEthernet 1.0.0d1
com.apple.Dont_Steal_Mac_OS_X 7.0.0
com.apple.driver.AppleBacklight 170.1.9
com.apple.driver.AudioIPCDriver 1.2.2
com.apple.driver.AppleSMCLMU 2.0.1d2
com.apple.driver.ACPI_SMC_PlatformPlugin 4.7.5d4
com.apple.driver.AppleLPC 1.5.3
com.apple.driver.AppleUSBTCButtons 225.2
com.apple.driver.AppleUSBTCKeyboard 225.2
com.apple.AppleFSCompression.AppleFSCompressionTypeDataless 1.0.0d1
com.apple.AppleFSCompression.AppleFSCompressionTypeZlib 1.0.0d1
com.apple.BootCache 33
com.apple.driver.AppleIRController 312
com.apple.iokit.SCSITaskUserClient 3.0.3
com.apple.iokit.IOAHCIBlockStorage 2.0.1
com.apple.driver.AppleAHCIPort 2.2.0
com.apple.driver.AppleIntelPIIXATA 2.5.1
com.apple.driver.AppleFWOHCI 4.8.9
com.apple.iokit.AppleYukon2 3.2.2b1
com.apple.driver.AppleUSBHub 4.5.0
com.apple.driver.AirPortBrcm43224 500.36.11
com.apple.driver.AppleUSBEHCI 4.5.8
com.apple.driver.AppleUSBUHCI 4.4.5
com.apple.driver.AppleEFINVRAM 1.5.0
com.apple.driver.AppleRTC 1.4
com.apple.driver.AppleHPET 1.6
com.apple.driver.AppleSmartBatteryManager 161.0.0
com.apple.driver.AppleACPIButtons 1.4
com.apple.driver.AppleSMBIOS 1.7
com.apple.driver.AppleACPIEC 1.4
com.apple.driver.AppleAPIC 1.5
com.apple.driver.AppleIntelCPUPowerManagementClient 167.3.0
com.apple.nke.applicationfirewall 3.2.30
com.apple.security.quarantine 1.1
com.apple.driver.AppleIntelCPUPowerManagement 167.3.0
com.apple.kext.triggers 1.0
com.apple.driver.DspFuncLib 2.1.7f9
com.apple.driver.AppleAVBAudio 1.0.0d11
com.apple.nvidia.nv50hal 7.1.8
com.apple.NVDAResman 7.1.8
com.apple.iokit.IOSurface 80.0
com.apple.iokit.IOBluetoothSerialManager 4.0.3f12
com.apple.iokit.IOSerialFamily 10.0.5
com.apple.iokit.IOAVBFamily 1.0.0d22
com.apple.iokit.IOEthernetAVBController 1.0.0d5
com.apple.driver.AppleBacklightExpert 1.0.3
com.apple.iokit.IOAudioFamily 1.8.6fc6
com.apple.kext.OSvKernDSPLib 1.3
com.apple.iokit.IOFireWireIP 2.2.4
com.apple.driver.AppleHDAController 2.1.7f9
com.apple.iokit.IOHDAFamily 2.1.7f9
com.apple.driver.ApplePolicyControl 3.0.16
com.apple.driver.AppleGraphicsControl 3.0.16
com.apple.iokit.IONDRVSupport 2.3.2
com.apple.iokit.IOGraphicsFamily 2.3.2
com.apple.driver.AppleSMC 3.1.1d8
com.apple.driver.IOPlatformPluginFamily 4.7.5d4
com.apple.driver.BroadcomUSBBluetoothHCIController 4.0.3f12
com.apple.driver.AppleUSBBluetoothHCIController 4.0.3f12
com.apple.iokit.IOBluetoothFamily 4.0.3f12
com.apple.driver.AppleUSBMultitouch 227.1
com.apple.iokit.IOUSBHIDDriver 4.4.5
com.apple.driver.AppleUSBMergeNub 4.5.3
com.apple.driver.AppleUSBComposite 4.5.8
com.apple.iokit.IOSCSIMultimediaCommandsDevice 3.0.3
com.apple.iokit.IOBDStorageFamily 1.6
com.apple.iokit.IODVDStorageFamily 1.7
com.apple.iokit.IOCDStorageFamily 1.7
com.apple.driver.XsanFilter 403
com.apple.iokit.IOATAPIProtocolTransport 3.0.0
com.apple.iokit.IOSCSIArchitectureModelFamily 3.0.3
com.apple.iokit.IOAHCIFamily 2.0.7
com.apple.iokit.IOATAFamily 2.5.1
com.apple.iokit.IOFireWireFamily 4.4.5
com.apple.iokit.IOUSBUserClient 4.5.8
com.apple.iokit.IO80211Family 412.2
com.apple.iokit.IONetworkingFamily 2.0
com.apple.iokit.IOUSBFamily 4.5.8
com.apple.driver.AppleEFIRuntime 1.5.0
com.apple.iokit.IOHIDFamily 1.7.1
com.apple.iokit.IOSMBusFamily 1.1
com.apple.security.sandbox 177.3
com.apple.kext.AppleMatch 1.0.0d1
com.apple.security.TMSafetyNet 7
com.apple.driver.DiskImages 331.3
com.apple.iokit.IOStorageFamily 1.7
com.apple.driver.AppleKeyStore 28.18
com.apple.driver.AppleACPIPlatform 1.4
com.apple.iokit.IOPCIFamily 2.6.8
com.apple.iokit.IOACPIFamily 1.4
Model: MacBookPro4,1, BootROM MBP41.00C1.B03, 2 processors, Intel Core 2 Duo, 2.6 GHz, 4 GB, SMC 1.28f3
Graphics: NVIDIA GeForce 8600M GT, GeForce 8600M GT, PCIe, 512 MB
Memory Module: BANK 0/DIMM0, 2 GB, DDR2 SDRAM, 667 MHz, 0x7F7F7F7F7F9B0000, 0x4354323536363441433636372E4D31364648
Memory Module: BANK 1/DIMM1, 2 GB, DDR2 SDRAM, 667 MHz, 0x7F7F7F7F7F9B0000, 0x4354323536363441433636372E4D31364648
AirPort: spairport_wireless_card_type_airport_extreme (0x14E4, 0x8C), Broadcom BCM43xx 1.0 (5.10.131.36.11)
Bluetooth: Version 4.0.3f12, 2 service, 11 devices, 1 incoming serial ports
Network Service: AirPort, AirPort, en1
Serial ATA Device: Hitachi HTS722020K9SA00, 200.05 GB
Parallel ATA Device: MATSHITADVD-R UJ-875
USB Device: Built-in iSight, apple_vendor_id, 0x8502, 0xfd400000 / 2
USB Device: Apple Internal Keyboard / Trackpad, apple_vendor_id, 0x0230, 0x5d200000 / 3
USB Device: IR Receiver, apple_vendor_id, 0x8242, 0x5d100000 / 2
USB Device: BRCM2046 Hub, 0x0a5c (Broadcom Corp.), 0x4500, 0x1a100000 / 2
USB Device: Bluetooth USB Host Controller, apple_vendor_id, 0x820f, 0x1a110000 / 5