The system only freezes when putting the system at load (ie: running a game or a graphics intensive software) right? And the audio looping occurs and continues when its locked up?
Like Wompoo, I suspect this is a hardware issue, for I have seen this happen on one of my machines (unfortunately, that one was a laptop). If your on a desktop, the problem shouldn't be unresolvable, but it may require you to swap some hardware.
Things you might consider doing:
-Check the temperatures on your video card and look up the specifications on your card to make sure it is within limits. If it is not, try cleaning out the card.
-If you have a secondary, or older video card, try swapping that in place of your GeForce 8800 GT to see if the problem persists. If not, which is more probable, then there is likely an issue with your video card. If so, then there is something else going on, which one can hope isn't the case.
The thing with graphics cards and games like these is the temperatures that the chips can produce. Every time I load a game, the card heats up, and every time I quit a game, the card cools down. This causes stress on some of the components on the graphics board itself. Enough cycles of heat ups and cool downs can result in cracking of the solder on the board, which leads to symptoms described above. If such problems still occur from driver swapping, then it is likely this is the case.
There is but one way to repair a video card that is suffering from heat/stress damage (assuming that this is the problem), and it involves a little heat treatment through baking it in an oven (seriously). Due to the intricacies of most cards, I can honestly admit that I would never have the guts to perform such a procedure, though there are a lot of positive reports out there of users who have had success doing this.
Hopefully that isn't the problem though, but if it is, you might want to consider a new video card. But first off, check your temperatures, maybe clean off some dust in your computer, and see if the problem goes away.