Yeah it sure does and can get a 8600Gt 512meg DDR3 600/1400core @ only $30Au more than a 7600GT 256meg card.
here is a pic of what happens, see at the edges of movies and at bottom

This is what should look like

Does it when playing for a short time and before anyone asks the is no dust build up on either the CPU or Vid Card fans, but IMO the card does seem abit warmer then it should and the fans are all working 1 front case intake + 1 side case multi speed thermal control venting out + 1 venting at rear case also thermal controlled,
But from what I have read about this particular card from other gaming sites including 3Dguru is a POS, So thats why going to get better Nvidia card for her, hopefully no more problems
Jolly Swagman