Well, short of reformatting... there are other things you can do...
Try reinstalling drivers (you prolly done that)... reinstalling DX8.1, etc. You know... the usual stuff. If that doesn't fix it, check the BIOS settings, and try running it at the default settings... not optimum ones.. but the factory ones. Then if you have onboard sound/video after resetting your BIOS disable them if you don't use them (like if you use PCI soundcard, or AGP/PCI video card).
If that don't do it, you can get Partition Magic and create a partition on your hard drive where you can save all of your data. Delete windows and reinstall it again. You'll have to rebuild the links manually to your programs, some you may have to run the install program again to add system files into the system directory or registry entries if they are needed. Then when that's all set, you can run Partition Magic again and that partition where your data was saved can be used again.
Although, if you are using Windows 2000.. you don't need partition Magic.. it should recover the partition without formatting that partition. I dunno about XP.
Of course, you could also check for shared IRQs (video/sound are usually the culprit)... or if your system is overclocked, try running all devices, BUS, and CPU at normal clock speeds and see if that solves the problem.
EDIT: You also might want to check to see if your memory has a leak in it, putting in older memory you know works would be one way to figure that out. You can also re-run Windows installations to "repair" the current windows installation. Sometimes this fixes problems... but you have to re-run DX8.1 installation after that.
-SW
