I have a Sony Vaio VGN-AR41E with an NVidia GeForce 8400M GT graphics card.
Your problem is almost identical to my own. No driver newer than 185.18.14 will work properly.
The moment I reach the GDM login screen, artefacts appear. The more I move the mouse cursor, menus, or (especially) drag windows, the more artefacts occur.
After a moment or two, the computer will freeze, then reboot itself without my input.
One strange behaviour I found was that I could _prolong_ the length of time the computer would work by swapping to a TTY for a few seconds, as soon as I noticed any artefacts. I could then return to an artefact-free desktop for a moment longer. It would _always_ end up with artefacts and an eventual freeze/reboot.