Yes I have latest drivers, downloaded from nvidia.com.... In case of server 2003, we have an option called hardware acceleration which i cant find in Windows Server 2008...
and take a look at Vista running in my notebook,

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I can't think of an other solution at the moment, maybe something bumps up later...
Good luck!
In case of Server 2003 i remember I had to increase / enable video graphics hardware acceleration to get full Hardware support

So any idea what happend to that option in Win2k8 ??
Unfortunately I am facing a lot problem with any application requirering hardware acceleration !!! Even resizing explorer window is giving performance problem
