After playing the game for a couple of minutues i seem to get this wierd texture corruption where most objects (walls/weapons/enemies) turn read and go all staticy.

I've updated to the latest nvidia drivers, easily meet the requirements.
Using a Nvidia Geforce 460M, 1.5GB video card

I get alot of the following error in my game logs
[Error] Failed to compute texture mapping density for mesh 'objects.....

I noticed someone else having a issue with mobile graphics on another thread, maybe by chance the mobile drivers aren't updated as frequently by Nvidia hence the problems your having. Does the latest change log for your drivers show anything related to Crysis 2 demo supported if not that might be your problem...Also can you run any Dx9, Dx10, or Dx11 benchmarks all the way through to rule out that your GPU is not acting up or overheating.