Extreme Screen Tearing

Have to tried repairing the installation via the configuration tool or doing an alltogether clean installation? You mentioned your drivers are up to date, but have you double checked that the game is patched to date? Doing a clean graphics driver installation wouldn't hurt either.

I always do the clean installation for NVidia drivers. I reinstalled, repaired, patched and tried to play the game 3 times already.

Also...

UPDATE: I was wrong when I said it was limited to this one game. Seems to be affecting every application including desktop (e.g. when I move windows vertically). I didn't try any other application until some time after I encountered this problem so it took me a while to notice. Apparently the only app not affected by the tearing is my Media Player Classic custom set with wide variety of codecs and filters. Also after switching to 59Hz Refresh Rate on NVidia settings panel the tearing is barely visible (and before you ask... No, never before have I had  to change the RR from 60 to any other value and the Monitor has been in costant use for over 3 years on the same settings and the same machine).

I'm stumped on this one. The only thing I can think is to consider rolling back your NVidia drivers to one before you had these problems. Also, does your machine have optimus running?

No, I don't have the Optimus tech - it's a desktop rig. Also that's another curious thing... I have no drivers to revert to, it's a relatively fresh install (except the basic ones supplied by Microsoft with Windows). Also ME2 installation did not update any of my drivers or libraries (at least to my knowledge), and still for some reason as soon as I launched the game I could already see the tearing. First I thought it was limited to ME2 but then even Windows desktop was plagued by it 🙂

The only thing I can think of that would affect that many programs, aside from drivers, is Microsoft Visual C++. You also mentioned it's a fresh install, is it Windows 8?

No, it's a Win 7 Ultimate 64-bit with SP1 fully updated (I mentioned that in my first post in rig's specs). Now that I think about it I did not try to install the C++ independently from an official source like the Microsoft website (didn't feel the need since pretty much every game from Steam, Ubisoft or Origin installs or updates the required version). I will try it though as soon as I have access to that rig again. I have 3 places and 3 almost indentical rigs at each one :D