Error -
Driver Stopped Responding And Recovered (ATI) or
Display Driver nvlddmkm stopped responding (Nvidia) – Do any type of search on these errors and you will get hundreds of hits, even here. This issue started out in Vista and is now seen in Windows 7. As you see, it affects both card manufactures. There are many theories on the causes, as well as solutions, to this problem, but no singular fix seems to work for all. While one fix might work for some, others find they don't work at all. I will however suggest you look at…
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a-
Overclocking – If your system is over clocked, chances are that you card is as well. Or, you may be simply overclocking the card by itself. Either way, back off and see what happens.
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b-
Overheating – The card could simply be overheating from a faulty or low running fan, to the thermo past on the heat sink wearing out or being inadequate for the job. Inspect the video card and insure everything is in good working order and that there are no loose parts.
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c-
Case Cooling – If your case is small and cramped or has inadequate ventilation or fans, well, not only will the case get hot, but so will the components inside, including the CPU and GPU, which puts out enough heat on their own!!! Plus overclocking also causes heat!!! Something to think about.
-d- Power supply - Many of today's GPU's require at least a 450 watt power supply. Is your power supply adequate for the job? Check with the card manufacture. Also, If the card requires a power connection (4-pin connector) double check to make sure it's connected!