What is wrong here? Opened it up and it was like this!

(clickable for larger pic)
The story behind it - I used it a bit at home, connected to the AC adapter, then closed it and put it in a laptop bag (quite tight on both sides - like a sleeve [you have to slide the computer out - it doesn't open]).
Then it was in the bag for 10-15minutes, I took it out, opened it up and this came up! (while it was like this, I could see the black mouse pointer and move it about just fine)
I did a hard restart, and then everything was fine.
What do you guys think is wrong? Do you think this is likely to happen again? Any tips or advice!?
Thanks

You've been possessed by a White Stripes video.

Seriously, looks like a graphic chip problem, but why it went like that because you put it away is anyones guess.
Another possibility may be you jogged the connector to the screen.

If its still under warranty or you have Applecare I'd take it in. Especially if it happens again.

There is a known defect with MacBook Pros powered by the NVIDIA Gefore 8600GT chip. Apple has extended the warranty to cover machines up to 2 years beyond the original warranty.

If the problem happens more than once, schedule it in for a repair. It should cost you nothing.

cwa107 said:

Apple has extended the warranty to cover machines up to 2 years beyond the original warranty.

Click to expand...

I am not in the US, I am in New Zealand - am I still covered for that extra year? I should probably go and check at a shop actually.
And will Applecare still give an additional 3 years if you buy that 2 years after purchase of mac?
Thanks!

ajdb9 said:

I am not in the US, I am in New Zealand - am I still covered for that extra year? I should probably go and check at a shop actually.

Click to expand...

Yes.

And will Applecare still give an additional 3 years if you buy that 2 years after purchase of mac?
Thanks!

Click to expand...

No, the Applecare warranty is separate and distinct from this one. Also, it must be purchased before the original one year warranty expires.

This warranty is specific to the video card. See here:

MacBook Pro: Distorted video or no video issues