I don't know what half of those command line options even do. Only thing I can say is they are no where close to my default command lines. Maybe someone else can shed some light on this.
The command lines are fine, they're features that shouldn't affect any of this... with the possible exceptions of -spec, -mipmap and -env. Try turning all three off and see if that fixes it. Then turn them back on one at a time.
This looks more like a driver issue to me. Were he using 3.6.10 then I'd say a code problem but 3.6.9 has been thoroughly tested and nothing like that has reared its ugly head. You DO have the 3.6.8 mediaVP patches too, right?
EDIT: D'oh, read the whole post Ryan...
Suddenly began occuring in the middle of a mod? Occurs in everything now? Three possibilities strike me immediately:
1. Hardware problems (dying video card, overheating video card, video card fan dead/dying/filled with dust, video card clocked too high, etc)
2. Cache. Delete the contents of your cache folder in the Freespace2\data directory, and each and every single mod directory. Corrupt cached file can cause all kinds of headaches.
3. Did you update any drivers or software immediately before the problem started to occur?
Onto easily fixable issues...
The 3.6.10 error is because you've grabbed an old 3.6.10 XT build and you haven't disabled normal mapping. 9800Pros and below do not presently support normal mapping (or at least, not in any sort of stable way) and thus you need to turn it off.
3.6.10 build. It's the most recent of the Xt builds. Make sure GLSL and normal mapping are both disabled (they should be by default if the build doesn't detect compatibility but you never know). The relevant options are found in the Graphics and Troubleshooting sections of the launcher settings. If that doesn't work, you can try the most recent 3.6.10 build without normal mapping. It's got some other glaring bugs, but if it fixes the graphical issues then that's something anyway. Get it here: http://swc.fs2downloads.com/files/fso-20080426_CHIEF_4609.7z