Your heat theory would be one possibility, since the computer might ramp the processor down if it was overheating and in turn garble the video. It would also be likely that online video would cause this, since the Flash player used to play most video like that is HORRIBLY written and so maxes out an entire CPU, generating a lot of heat.
If that is the problem, there's either something wrong with the machine causing it to overheat, or there's something really wrong with the way you're using it.
Possible causes:
*You've got it sitting on a very soft surface that's blocking the air vents or something.
*The internal heat sinks are totally clogged with dust; I've seen this happen, and even kill a Dell notebook. Blowing it out with compressed air/computer cleaner or slapping a vacuum against the vents might fix it without having to disassemble it.
*One or more of the fans is broken/stuck.
*A temperature sensor controlling a fan isn't working, so the fan(s) isn't ramping up properly.
*The thermal connection between the chip and heatsink has failed.
*There's something broken on the motherboard that is exacerbated by heat (though I'd expect this to cause crashes).
You might try running the Apple Hardware Test disc that came with it to see if it reports any fan problems, in addition to trying the dust cleaning.