1) You said several items have been replaced already, motherboard and powersupply replaced.
So did they put this computer together with leftover / used parts???? These should not need to be replaced within one year? This being the case though, maybe they built the computer with a defective or very old Video card.
2) is the monitor a flat screen or CRT (large and older) The CRT has a refresh rate that will look like flashing monitor. The older the monitor the worst it could be. Also if you have a CRT monitor and have florescent lighting, the refresh rate of the monitor and the florescent lighting will interact and the monitor refresh rate will become very noticeable and look like flashing.
Hope this helps
Your speed question..
If you go to computer properties, how much RAM is recorded. The thought here is to make sure the 2G RAM is recognized. If it is not, then the BIOS has limitations to the amount of RAM your computer can recognize.
Also you may have a bad RAM slot on the motherboard that leave the RAM inserted to the slot unusable.