In one case, this Event ID appeared on Windows Server 2003 SP1 and Windows Server 2003 R2 SP1 when it was installed. The computer had a Matrox Millennium G550 PCIe display adapter installed. When Windows was restarted in normal mode after the installation, the Windows graphics screen appeared, but when I logged on, the screen turned light grey/blue and the keyboard and mouse locked up. I restarted the computer with the power switch, went into Safe Mode and opened Device Manager. I found that Windows Server 2003 had installed a generic Matrox Millennium G550 driver that did not seem to be compatible with the model that I had. I installed the correct Matrox driver by running a setup program for it from the CD supplied with it. When I restarted the computer normally, the lockup problem had been fixed and this Event ID no longer appeared.
This event should normally read:
The driver G550DHD for the display device \Device\Video0 got stuck in an infinite loop. This usually indicates a problem with the device itself or with the device driver programming the hardware incorrectly. Please check with your hardware device vendor for any driver updates.
See the comments for event id 108 from ati2mtag.