I'll start off by saying I have the same problem but no REAL solution. As far as I know this happens with Dell Dimension 3000 Desktops. Bookworm's solution will work for a time being but eventualy will go back and you'll find yourself system restoring WAY too often. I have no idea why this reoccurs. I've only found a few cases of this on the internet:
http://www.grohol.com/computers/dell.htm(there are losts of posts so search for the phrase "I PURCHASED A DELL DIMENSION 3000" to see a similar situation.
Dell experts want to change faulty hardware or sound devicess but this does not help(I've been through the "back and forth" as they "guessed" everything). You know what helps? reinstalling Windows(Well at least for sometime). I put in my restoration CD in and ran the setup in windows. Click on upgrade and windows will install over itself WITHOUT losing your info. My suggestion is getting an external hard drive because you can never trust your computer.
TO THE EXPERTS READING THIS: The sound/video is Fine. The distortion is just a by-product of the real problem. The computer runs Extremely slow...startup is very annoying(you know the black screen when windows starts and that little blue line goes left to right under the logo? That goes left to right like 50 times before the computer starts as opposed to the 5-9 times it normally takes)....FYI This happens out of the blue. My computer is working fine then BAM! Problems! My computer is not bogged down with Spyware/malware. this happens if my computer is connected to the internet and when it isn't. It happens even if I down't download anything. It is not a direct result of software.(Haven't installed anything in Months). I've monitored updates to software I have now,....nothing seems to be in direct relation.
Dell has Failed. Dell's Technician that they sent to swap parts and trouble shoot have failed. Message board members across the net have failed. I will post the fix in every possible corner of the internet if someone knows of one.