I am using Photoshop CS5.1 on a Windows 7 laptop. Its about 3-4 years old. But this problem has started only recently.
It also drops the quality of my images sligtly.
Does this have to do with my video card?
Thanks in advance.
Weird, I haven't heard of problems like that in AMD's recent drivers.
You might need to talk to AMD about other diagnostic tools to figure out what is going wrong with your driver/video card.
Until you can determine the problem with the driver, you could try setting Photoshop's GPU mode to "Basic", or disabling GPU drawing.