While we're not quite sure what part of the Catalyst 3.8 drivers are causing this, some part of the driver (whether it's the new VPU Recovery feature, HyperZ Enhancements or the ATI Overclocking software) is causing the core on BBA and OEM Radeon cards that are identified as "RADEON 9800 XT", "RADEON 9800 PRO" and "RADEON 9800" in Windows to have their GPU's overheat by as much as 15*C over normal during 3D graphics sessions. This has caused a number of fans on the Radeon 9800 XT series to fail, allowing the heat to completely destroy the card.
Alleged Monitor Damage
So instead of having the monitor "flicker" once when it switches to the desired resolution/refresh, monitors are "flickering" between 4 and 8 times, with resolutions and refresh rates that are beyond the capability of the actual monitor.
As a result, some monitors have been damaged, while others have blinked out and recovered.
ATi already replied that they were not able to reconstruct the problem. I don't know how big this problem is, but some people are reporting problems in forums. So maybe it's smart to downgrade to the Catalyst 3.7 drivers until there is more clarity.
You can read it here at their forums