Vista - HELP - User Account Fuzzy screen popup

Background:
I have an issue with UAC, since recently installing Vista on a fresh HDD. Whenever the User Account Control screen pops up when im installing something or otherwise (its seems to pop up way too often) the screen is messed up.
I am using vista ultimate 32. Its not feeling very ultimate right now.

Symptoms:
The UAC screen, which should normally be dimmed black/transparent, has become fuzzy and like a bad jumble of grey white and black on half of the screen, (which seems to vary from top to bottom on different instances). The yellow pop up image is fine, but the background dimming image is always messed up. My Video cards check out fine and have updated drivers.

Questions:
Is there a way to fix this without yet another fresh install of the OS?
Would a registry cleaning program fix this?
Should I just turn UAC off?

http://www.youtube.com/watch?v=80sWifG40B0

Thanks in advance
Speedyquad

A query broken down by background/symptoms/questions always brings a little tear to my eye.

Yes, there's always a way to fix everything without reinstalling, except sometimes it's not as fast. It's hard to tell what's faster in your case until the root cause is understood.

When the background goes grey and you see the UAC prompt, what's actually happened is that a screenshot was taken of your current desktop, converted to B&W, and then presented as a simple bitmap background on the secure user logon desktop. In other words, you were briefly switched back to the logon desktop for security reasons - it prevents screen scrapers and similar utilities from messing with the UAC prompt and pressing buttons you may not want pressed.

Although I've never seen that symptom myself, what's actually happening to you is that the desktop screenshot is being corrupted somehow.

Have you installed desktop "extender/enhancer" software?

Does the same thing happen when you boot to safe mode?

Can you post a camera photo of what this corruption looks like, just out of curiosity?

Lol, sure here is a photo... I got creative and took it with my camera, as UAC disables screenshots, as I just found out.

fuzzy UAC picture by speedyquad4 - Photobucket

Ill try the safemode tommorow as a means to deduce possible driver complications. I forget about safemode somedays.

Cheers
speedy