I am having the same problem using an E4200 and the 32 bit version on Windows 7 - same chipset. I also downloaded the new drivers which did not help. Has anyone found a fix?
Looks like this is the place for discussion http://superuser.com/questions/45296/display-glitches-in-windows-7-on-dell-latitude-xt2
I've checked with a reliable colleague, and this is definitely a problem with the driver. I'm assuming its a problem with the intel mobile 4 chipset on all win 7 x64 machines, so I'm surprised no-one from intel has jumped on to this yet. I logged a support call with them a week ago ...
I guess it's sit-and-wait!
Disable virtualization support in the bios and it fixes the problem. It's a known fault with the chipset. The other option is to install matching memory modules. This fault seems to be present with any computer which is using the 4500mhd intel graphics chipset. I had the same problem on my Dell e4200.
The problem for me is that I need to run several apps in XP mode, so I cannot disable virtualization. I am not sure what you mean by matching modules. Either way, I have a E4200, so there is only one memory module in there. The rest is integrated. I have turned off the Aero, and that seems to fix it. But that takes away some of the novelty of having Windows 7 too. I am waiting for a driver update. Has anyone gotten through to Intel at all? They are quiet on this...