If you are receiving this error "Your system has recovered from a serious error", please check the following URL for a possible solution.
Or contact your computer manufacturer to obtain customized drivers for your computer model.
Here is the link to download latest graphics drivers from Intel site:
This is definitely a bug in the drivers. I've installed the latest version (126.96.36.19984) in Windows XP and I'm having exactly the same issue as you: I noticed it first when I opened the file manager and tried to empty the trash bin. The icon disappears and the computer crashes with an error of igxprd32. It happens with all drives though.
Funny thing is, developer team seems to be aware of the issue but failed to resolve it:
Driver Release Notes:
I'm having exactly the same problem you described with an Intel motherboard! (Intel DH67BL - DH67BLB3)
I've tried graphics drivers IGXPRD32 version 188.8.131.5274, 184.108.40.20684 and 220.127.116.1187 and none of them have fixed that behavior.
(crash when right clicking on a top level icon in the left treeview under Windows Explorer under Windows XP Pro SP3)
I've also tried to disable the igxcui dynamic link library loaded by the explorer but with no more success...
Anyone knows an updated or older version of that driver which does not have this bug?
As a solution for some of you:
This problem is also related to a bad "GPU" on the CPU. I have had several CPUs (i3 3220's) lately with bad integrated graphics. They work fine with a dedicated graphics card but 'onboard' graphics crash or fail completely. I may have needlessly RMA's a couple motherboards because of a bad batch of CPU's purchased through an Authorized Reseller.