I'm posting this here because I see a lot of people posting issues and I've followed some of the suggested trouble-shooting ideas on this site.

Hope this saves someone many hours of trouble-shooting time. It was a horrible experience to have to go through.

Its a Windows Driver issue. I suspect this goes back to the Vista days as well.

Here's the entire troubleshooting with problem description: Gadgets: GA-890FXA-UD5 Asus Crosshair IV Formula CORSAIR TW3X4G1333C9A HD5850 BSOD

6-28-2010 Solved as described. I'm afraid to even check to see if this solves the problem I had with my other computer using the evga 9800GTX+. The ONLY reason I built a new computer is because of problems I had similar to my story with the new hardware. I plan on setting it up for my kids, so I guess I can load Windows on it first to test it out. Then, its Ubuntu Lucid 10.04 LTS time for the kids.

Posted on Microsoft Answers. Lets see if they edit the "Its Microsoft's fault" part
[SOLVED] ATI HD Series Random Blue Screen error: BugCheck 0x0000007e ntoskrnl kb965494

[Related Problems]
Solves random BSOD Blue Screen of Death ATI HD Series cards - Spontaneous random BSOD with different error codes each time
Solves problems with SoundBlaster X-FI sound (on board and add on card) extreme gamer - Sound would sound severely choppy or cut off abruptly
Solves random system delays - system randomly pauses for no apparent reason
Solves Steam Disconnect problems - Quite noticeable in Call of Duty 4 Modern Warfare 2
Solves Call of Duty 4 Modern Warfare 2 in game random delays or dropping out of game while your playing. Usually when first starting up the game. Not having NAT enable may cause a similar delay as well.

[Source of problem]
The problem is with Microsoft loading an old driver for new hardware when you first load the OS. Shame on you Microsoft. 6 weeks to figure this one out and it is CLEARLY Microsoft's fault. Sorry but no NDA's here.

Its a simple fix, yet almost impossible to find. Catalyst Install Manager - ATI HDMI Audio Device will add an Audio device rather than replace the HDMI Audio Device driver Microsoft loads at OS install time. Or the driver is ignored all together because Microsoft already loaded a driver at install time for that device.

[Clean install FIX]
When installing the ATI 10.6 Catalyst, use custom install and exclude the HDMI Audio by unchecking the box next to the HDMI Audio. The drivers still end up in the ATI Catalyst installation directory so you may want to note the ATI installation path. The problem here is ATI will add a HDMI High Definition Aduio Device, NOT replace the Windows device already loaded. Or it may not load a second device. Either way, it will use the Microsoft device driver.

Update Driver Software with the ATI driver- Microsoft High Definition Audio Device driver manually following the instructions below.

[Windows OS Already loaded FIX]
-Device Manager-
Updated driver using computer -> right click manage -> devices -> sound -> right click HDMI High Definition Audio Device -> Update driver and browse to ATI directory (check the include sub-folders).

Also noticed default BIOS settings cause problems with NB and DRAM. Overclocked to get voltage up on the system. Even though I adjusted BIOS settings, I still got plenty of BSOD until I updated the Microsoft High Definition Audio Device driver with the ATI driver.

Ran Ubuntu without a single issue prior to making any changes to accommodate the Windows 7 OS. For some reason Windows is fussy over certain settings where as Ubuntu 10.04 LTS loads and runs without a single problem.