Display Driver Stopped Responding and Has Recovered

Just some advice needed here. I'm using base iMac 21.5" from mid-2011 and recently I've had a few of the above error messages. I'm running Windows 7 Professional. Bought the iMac in May and it's started happening in October/November. It has AMD Radeon HD 6750M Display adapter.

My computer will lock up, the display will go black, and start tiling until I see the display come back on and have this balloon pop up near the clock: "Display Driver Stopped Responding and Has Recovered"

If I try and view a video after this, I'll get a BSOD and the computer will re-start.

The below is just a piece of what I get when I copy the notes when the computer restarts.

Problem signature:

Problem Event Name: BlueScreen

OS Version: 6.1.7601.2.1.0.256.48

Locale ID: 1033

I've checked the drivers via Device Manager and it states they are up to date.

Is this faulty hardware? Is there something more I can do? Since it is sporadic, is there a way a tech can re-create this? Would diagnostics testing show any problems? (I've got coverage with Future Shop here in Canada - which includes a free diagnostics when I bring it in). Are the Data Dump's available to review on my machine anywhere? Hidden?

I'd just like to get this resolved.