Hi,
I have the same card and I get on average 750Kh/s without pushing the card too much. My guess is that your settings are wrong.
I use the following (written here as in the miner's .conf file, sgminer in my case):
"kernel" : "zuikkis",
"scrypt" : true,
"gpu-threads" : "2",
"gpu-engine" : "1080",
"gpu-memclock" : "1500",
"gpu-powertune" : "0",
"thread-concurrency" : "8192",
"shaders" : "2048",
"lookup-gap" : "2",
"worksize" : "256",
"xintensity" : "4",
You'll find the rest of the settings needed if you do a search on google. I don't have the confing in front of me right now and I can't remember them all, but the ones above are those that count.
The kernel I use has been optimized (not by me, obviously), and it is included in the latest version of the sgminer (i think it's 4.1.0). It will give you the extra 30-40 Kh/s and a better overall stability of the card.
Also, make sure you use these two lines in the .bat or command prompt window before launching the miner:
setx GPU_MAX_ALLOC_PERCENT 100
setx GPU_USE_SYNC_OBJECTS 1
But I guess you already do, since you wouldn't be getting that hashrate without them.
As for the artifacts you mentioned you see while mining, from time to time it happens to me too. Used to happen more often when I pushed the card by overclocking (1120+ engine and 1700+ memory).
There's a high chance that it has something to do with the drivers.
In my case, I switched from nVidia without a proper cleanup. Conflicts between the drivers might be a plausible explanation for the artifacts.
I read somewhere that the Catalyst driver has issues with Windows 7's Aero themes... not sure about that though, since it's just something I read on the internet. Try using a basic theme and see if the problem persists. When I removed the nVidia drivers completely (or at least I think it was "completely"), I was unable to use the aero themes at all, until I re-installed Catalyst. You might want to re-install your entire operating system and see if the problem persists (I plan to do that... eventually).
Artifacts are never a good sign, but on the other hand, mining pushes the card to it's limits. I doubt that these cards were intended to be used at close to 100% over extended periods of time. While gaming, you will probably use the card at 60-70% of it's full potential, going above that only for very short periods of time (for example when something explodes near you, or when you go through a cloud in an airplane... you get the picture).
Anyway, using the settings I mentioned above, I rarely see the artifacts, and the card runs stable at ~75 deg. Celsius.
Hope this helps. Have fun mining! o/