DirectX Problem...

Start --> Run --> dxdiag

^ That opens the DirectX Diagnostics Tool thing, yeah? Well when i go on there and click onto the "Display" tab and click the "Test Direct3D" button - it gives you some tests yeah? Well the one were it runs in Directx7 works fine and so does DirectX9, however when it does DirectX8 the screen mangles up. The same thing happens for a game i wanted to play (Image 1). Any ideas why this happens??

Image 1: http://www.dalehay.com/directx8problem.png