I have the exact same problem. I also have a Dell Studio 1537 and updated Vista to Windows 7 yesterday. I also did the same thing like update the 4 series express chipset driver version (18.104.22.1681). The horizontal lines continue to appear on browser windows etc. So I tried a couple of things. I changed the color depth to 16 bit instead of 32 bit and that is a temporary solution to the problem. The downside is that the Windows 7 aero affects are not supported with the 16 bit color depth. I realized one other thing that is also a temporary fix - when I disconnected my secondary display monitor, my laptop worked just fine without any horizontal lines at the 32 bit color depth.
I have same problem, do you have issue like this http://communities.intel.com/thread/6592?tstart=0 ? Change bit color is really temporary, is not solution, and I do not have another monitor, so your second advice is not resolving for me too.
What I saw, Dell 1555 and 1737 have some new drivers, but these are not compatible with 1537. I have got some information from Dell that is not sure if this model will be support with Windows 7.
Just reverted to an old driver dated 9/9/2009. Ver. 22.214.171.1248. Downloaded it directly from the Intel website http://downloadcenter.intel.com/Detail_Desc.aspx?agr=Y&DwnldID=18139&ProdId=2991&lang=eng. Aero theme works fine with this driver with no horizontal lines.
Thank you very much. I have been trying this driver for a week without problems!