IE and Fire Fox

Images on websites were displayed distortedly ever since I started using my brand new Dell D610 Lattitude. I thought it was a problem with the OS. And I started looking for help in this direction. But after installing Fire Fox, I realized it's do with the browser settings. I still can't figure out what was wrong with my IE as it was up-to-date, latest version, with all possible upgrades. Not only the image was distorted, also they lay out of the site were screwed up for certain sites.

I have enclosed screen shots of both the browser windows. Anyone knows what's wrong?

Image with Internet Explorer. You can see image distortion, and even the lay out is screwed up.

Image with Fire Fox. Perfect.