Dell :: XPS M1330Screen Froze With Horizontal Greenish Pixel Lines

I've been travelling for the last 14 months and couldn't stand using my Asus EEE 901 as my only computer. So I got my beloved XPS M1330 send to me from sweden (where I'm from) a couple of weeks ago.

Everything worked fine when I got it, but quickly installed windows 7 on it (since win 7 wasn't released when I left home).
I did however notice that the CPU usage was always between 10-40%, even when I didn't do anything. It became better when I installed windows 7 but was still unusually high. That didn't really do anything because it was such pleasure using a real computer after a year with a 8,9" netbook as only computer.

[PPROBLEM START]
Approximately 1,5 week after I recived my computer, I was surfing the web as usual, when I suddenly noticed a spot in the middle of the screen. I tried to scroll to see if it was some dirt on the screen but it followed the scroll.
A couple of second later the screen got colored horizontal lines and after another couple of seconds the screen looked like this:

I got completely terrified, and the happiness i had for my "new" computer quickly turned into a horror movie.
I had to hold the power button to turn it off and after a couple of minutes I started it again. Bios loading looked fine but the screen froze at the Windows loading bars with some colored lines in the middle. Had to hold power to turn it off, and haven't dared to start it again since.

Is it my graphics card (8400 GS 128MB) that has died, or is it the motherboard which is causing the problem?

And are there any chances that I somehow can fix it?
I bought my XPS M1330 the 28th of December 2007 (2 years and 4,5 months ago), is it still covered by any warranty? Because it is obviously not a user caused problem.