No I'm not using the desktop.
Since you asked I just tried a lower intensity than the originally set on 17. It seems to work (at a lower hash rate... same temperature tho) with intensity 13.
Ah, Litecoins. That is a mystery in and of itself. I thought you were mining BTC till I saw your other thread on this same subject.
But I would get the device driver failure like you describe when overclocked the engine too high or underclocked the RAM too much or did something too graphic intensive while mining.
So since it stabilized after lowering intensity I would say its related to that. I think there is a litecoin readme has some suggestions on which driver/sdk combination and as well as settings. From there its probably trial and error.
Hopefully someone who is well versed in Litecoin will have better input for you.
Good Luck,
Sam