So I'm currently in the process of RMA'ing my XFX 9800GT XXX Edition. Apparently it kicked the bucket today. What happened is that while playing BC2, the game froze and thousands of pixels changed color, then I got a BSOD which was unreadable due to many white artifacts all over it and finally the monitor would lose signal. I rebooted it, and everything was still covered in artifacts and distorted. So I figured the card was overheating. I left the pc off for a bit, turned it back on and everything was fine. I could still boot to safe mode and boot normally but of course when I ran a game like BC2 it would do the same thing. 
 
One thing about the 9800GT's by XFX is that they are loud. Mines was always loud under heavy loads and this time while playing those games, the card was silent. So I figured the fan isn't working right anymore. I was using the latest drivers 197.13. I swapped the card out with a FX5200 and the pc has been running fine. I even tried reinstalling the card and it ran fine until I played a game. I reinstalled it a 3rd time and after loading up windows it just crashed again without having to open any games or installing the latest drivers.
 
I'd like to note that I'm using a 500watt PSU by Xclio. It's not a well known company but they got good reviews for their PSUs.
 
So what I'd like to know is what causes crap like this to occur? An underpowered card? Damaged GPU RAM? Or is the card just over heating or simply dying?

Sounds like the fan died and the card overheated.  It happens.

Yeah man sometimes they just go bad. I remember i had an 8800gt that go so hot some of the paste connecting the cooler melted, which dislodged the cooler and eventually caused the destruction of my card.

I bet overheating and that power supply is probably the bare minimum required. 

Yea Nvidia recommends 450watts for that model but XFX recommends 500watts for theirs. But I've had the card for about a year and I never had any problems with it.

you probably installed the 196.75 drivers which have been melting cards lately because there is a bug in the drivers which doesn't turn on the fan.

Hi, i'm a pc gamer and those artifacts happens usually when you overclock. I am not saying you overclocked your card, however the heatsink and overall card is smaller than other videocards, where a game like battlefield bad company 2 can easily overheat it. It's known when your overclocking a card, you have to turn the fan up to 100%, I hope you have a program to do that in the future for your next card. Also artifacts is well known and if you get it, you have to slightly underclock that card.

 
Since you didn't overclock it, what artifacts can do when you are dealing with extreme heat is make that permanent. Then again everyone is saying the fan died, well heat is the main problem and you can't fix the problem yourself, the card is ruined.

It honestly sounds like an overheat/your PSU couldn't cut it.
 
It blows but it happens friend. Learn from your mistakes!