first off I run Windows Vista on my laptop with the latest updates and is supposedly immune to viruses right now..
This morning I was happily playing some WCIII when suddenly my screen shut off.
Well it turned on again after a few seconds, and I continued playing but 5 mins later it shuts off again, and I get a blue screen.
after which everytime I try to turn it on normally and log in, I get a lot of noise(looks like white noise but with different colors) and my PC freezes without even displaying my desktop(tried restarting amnually about 5 times, and the same thing happens everytime I reach the log in page). I boot through safe mode, and i get through the log in page, I try to back up my files but a few minutes later the same thing happens again.

after which I try recovery mode to factory default settings using boot CD's I got when I first bought my laptop, So I boot through CD then I get hit by the noise again and my pc freezes.
After the reinstall, the pc says "please wait while we run windows for the first time" and asks for registration info, I comply and start typing when suddenly I get the same noise all over again.

after another restart, my pc seems to be working well, Im installing my games again right now.
im already about an hour and a half in.

My question is, Is this a hardware problem?
thanks for any input. ^^

yep its a hardware problem

hmm system crashes. the processor or the HDD is overheating.... going by the instant crash instead of BSoD.... processor over heating

conclusion: your heatsink is going bad.

Though so...
by any chance would it be a display driver issue?
I read the blue screen, before the noise started happening, and it says display driver error.
im guessing just letting it cool off wouldnt work?

right now its working fine though...
what would you recommend I do?

theres a chance but normally when a display driver crashes and burns your PC reverts to 16bit 640x480 mode. Then again, I dont think vista supports either so a BSoD makes sense.

recommendations, wait for a more stable Vista driver or bitch at your PC manufacturer or retailers were you bought the PC if it happens again.

 laptop heatsinks suck to replace

BSoD = Blue Screen of Death

what generally happens when a heatsink goes bad?
does it melt or something?

 it starts rattling really bad then stops which causes the processor to burn out or pop. If it pops watch your leg, it can hurt, REALLY BAD.

Wow i didnt encounter anything that bad, plus my laptop is factory built, its an hp.
So they would have made it a bit safer with the heatsinks... I think..
Am I still good then? Do I just let it cool off? This is the only instance it happened for over a year.
I researched a bit and found out.

"If your cooler is insufficient and the temperature exceeds the maximum operating temperature, then this does not mean that the CPU is automatically damaged. With AMD CPUs, you will usually encounter crashes if the CPU is overheated; but these go away as soon as the CPU is cooler again. In the long term, running the CPU at a temperature that is too high may reduce the CPU life, since an overheated CPU is more prone to electromigration - even if it runs stable. With P4 CPUs, the CPU will turn its speed down automatically when it overheats. No damage to the CPU is possible, but the system will get slower while it's hot (which, in some cases, users might not even notice)."

please confirm. ^^
Do I just let it cool off and it might be better? I have an intel btw.

Uhh, a heatsink going bad is a fucking longshot. Much more likely, and based on your description, a fan has gone bad.

Since you were playing a game for a few hours, and then encountered "noise" its likely the GPU that got hit. Corruption of visuals. aka odd colored pixels, is something that frequently happens with an overheated GPU. When its mild, as in pushing overclocking just a tad too much, the effects will be just a few pixel here and there. But a screen that has completely fucked up is something I haven't seen.