I found a page that describes what seems to be the same exact problem
Here is a excerpt and a link from the page
I am not familiar with kernal options so i don't know what to make of this solution
When installing the drivers I found some problems involving that the screen is distorted/scrambled when starting X. At the time of this writing (6 mars 2003) the issue has been reported to Nvidia and they will include information about it in their README file concerning installing the drivers. Except for my setup (Geforce4 MX) this problem has also been reported to occur in GeForce4 - 8x Ti4200 setups.
Linux IA32 Display Drivers driver version 1.0-4191
Geforce4MX 440, AGP, NV17
X-server 220.127.116.11 (Default X-server on Debian 3.0r0)
Custom compiled kernel on Debian 3.0, kernel 2.4.20 from kernel.org
When starting X after installing the drivers the screen is distorted/scrambled with seemingly random characters and you cannot do anything to fix this.
After many trials and errors by recompiling the kernel with different options I discovered that the problem was caused by enabling the following options:
Processor type and features -- >
[*] Local APIC support on uniprocessors
[*] IO-APIC support on uniprocessors
By disabling these options the X server works fine. So the problem is related to the APIC support and can be eliminated by compiling without these options.
Now if you have a SMP kernel with multiple processors APIC will be set automatically, to disable this feature use the noapic boot option; this forces interrupt processing to legacy PIC mode which limits interrupt processing to the first CPU.