I have a similar-looking Acer laptop with exactly the same problem that was given to me by a friend who got sick of it being broken.
At first I thought it was the monitor position switch (on the right of the lower chassis). I tried unplugging it (leaving the switch open) and shorting it to force the switch closed. Both SEEMED to help for a while but then the problem returned. I also suspected pinched cables, so I removed all the casing cosmetics and even tried with none of the case reinforcement in place...no help.
Then the problem started occuring on the VGA monitor output as well. After giving up on getting the inbuilt display working, I decided to hook the damn thing up to my TV and use it as a Linux minecraft server. After a while the VGA output began flickering, ghosting and distorting, too, and it became completely unusable.
I have no idea what the issue is at this point. I'm assuing it's either power to the video hardware, or the video hardware itself. Both are integrated components so it's not really worth the effort to investigate further. I ended up taking the HDD out of the laptop and putting it in my PS3, which means the thing still served a nice purpose.