Which G4 do you have? There was an issue on PB Aluminum 12" books with the Graphics Software Update. It was not compatible with the NVidea graphics chip/card. I ran into this myself, same conditions as you, on two 12" PBs. I had to do a clean install and then update (without the Graphics software update) to get rid of the problem.
Whether 10.5.3 fixes this I don't know, but I doubt it.