how it works?
Without going into the elecrical enginnering detail too far, the control the drivers actually have over the card is quite remarkable. While they can't do anything they want, any hook in the firmware for the card can be accessed and then set. They can change the signal the card outputs to the monitor, and I suspect some sort of internal signal on the card was interfering with the output signal to the monitor, causing what looked like a flicker but was in fact a signal error.
The flickering issue i suspect, given the number of problems this .1 driver increment has fixed, was due to a bug in the programming that resulted in interference. This is opposed to the drivers introducing a workaround for the interference issue.
Anyway, this is all speculation and my major point is this sort of thing is easily fixed by a driver, once the problem and solution are known.
edit: I forgot to mention- I have a laptop with a GF4 MX go, so I haven't seen the flicker problem in action.