I had this problem with my Optiflex 755 for about a week. I downgraded from Vista to XP and I had no clue on how to resolve this issue. Dell support told me since I changed my OS they cannot support, but as a one time thing they supported. To my surprise they screwed up my computer much more and made me reinstall OS. Even after I reinstalled OS, I was getting this problem.
Anyway, the problem occured because of the wrong Video Driver. Dell Driver CD comes with RADEON HD 2400 PRO and RADEON HD 2400 XT, you have to make sure that you install the correct one. Go to your Event Viewer and see if you have any errors with RDPDD.dll, I had 'RDPDD.dll failed to load' in my event log. In my case I had installed 2400XT and it was causing this problem. Problem is your Device Manager does not show any issues with the wrong driver. Try insalling the correct driver from the CD or support.dell.com, even if it does not work go to AMD website and download the correct driver. It should resolve the problem.