I've been having the same issue in the 1.7 pre-release but already have the most up to date drivers for my ATI HD4850 card.
As instructed I've forced a crash with F3+C and posted the crash report below.
I've got screenshots and a dxdiag in my old ticket: [MC-36731]
Edit: I've now also tested and the problem does not occur when mipmapping is turned of.
Now at least I can play the game 😃
---- Minecraft Crash Report ----
// Sorry :(
Time: 23-10-13 17:07
Description: Manually triggered debug crash
java.lang.Throwable
at azc.o(SourceFile:1383)
at azc.ad(SourceFile:753)
at azc.e(SourceFile:704)
at net.minecraft.client.main.Main.main(SourceFile:103)
A detailed walkthrough of the error, its code path and all known details is as follows:
---------------------------------------------------------------------------------------
-- Head --
Stacktrace:
at biy.a(SourceFile:284)
-- Affected level --
Details:
Level name: MpServer
All players: 1 total; [bjd['Jerodar'/150827, l='MpServer', x=183,74, y=80,62, z=221,41]]
Chunk stats: MultiplayerChunkCache: 342, 342
Level seed: 0
Level generator: ID 00 - default, ver 1. Features enabled: false
Level generator options:
Level spawn location: World: (256,64,252), Chunk: (at 0,4,12 in 16,15; contains blocks 256,0,240 to 271,255,255), Region: (0,0; contains chunks 0,0 to 31,31, blocks 0,0,0 to 511,255,511)
Level time: 1397773 game time, 1419032 day time
Level dimension: 0
Level storage version: 0x00000 - Unknown?
Level weather: Rain time: 0 (now: true), thunder time: 0 (now: false)
Level game mode: Game mode: survival (ID 0). Hardcore: false. Cheats: false
Forced entities: 82 total; [bjd['Jerodar'/150827, l='MpServer', x=183,74, y=80,62, z=221,41], up['Bat'/151555, l='MpServer', x=106,95, y=26,59, z=297,27], xb['Zombie'/151826, l='MpServer', x=144,50, y=14,00, z=189,50], up['Bat'/153463, l='MpServer', x=181,50, y=22,10, z=280,78], wk['Creeper'/153871, l='MpServer', x=143,34, y=58,00, z=176,15], ww['Skeleton'/152228, l='MpServer', x=205,34, y=14,00, z=180,25], vx['entity.MinecartChest.name'/150887, l='MpServer', x=126,50, y=11,50, z=148,50], uz['Pig'/132, l='MpServer', x=255,13, y=64,00, z=168,28], up['Bat'/153744, l='MpServer', x=156,57, y=25,02, z=189,30], up['Bat'/153186, l='MpServer', x=164,75, y=43,98, z=182,88], ww['Skeleton'/152781, l='MpServer', x=136,50, y=35,00, z=146,50], up['Bat'/153742, l='MpServer', x=162,97, y=25,00, z=192,44], up['Bat'/153743, l='MpServer', x=161,31, y=25,01, z=193,73], ww['Skeleton'/153878, l='MpServer', x=190,50, y=12,00, z=145,50], xb['Zombie'/153872, l='MpServer', x=236,50, y=54,00, z=185,50], xb['Zombie'/153873, l='MpServer', x=240,50, y=54,00, z=184,50], up['Bat'/151384, l='MpServer', x=146,19, y=15,10, z=155,75], wy['Spider'/151946, l='MpServer', x=166,28, y=41,00, z=183,81], xb['Zombie'/151821, l='MpServer', x=146,50, y=14,00, z=191,50], xb['Zombie'/151823, l='MpServer', x=145,50, y=14,00, z=191,50], ww['Skeleton'/153733, l='MpServer', x=143,50, y=38,00, z=149,50], xb['Zombie'/151822, l='MpServer', x=145,50, y=14,00, z=189,50], wk['Creeper'/151039, l='MpServer', x=172,50, y=44,00, z=186,50], up['Bat'/153441, l='MpServer', x=155,50, y=39,00, z=166,25], ww['Skeleton'/151037, l='MpServer', x=172,50, y=44,00, z=184,50], xb['Zombie'/153167, l='MpServer', x=217,81, y=7,00, z=145,03], ww['Skeleton'/152067, l='MpServer', x=126,50, y=26,00, z=146,50], ww['Skeleton'/153439, l='MpServer', x=147,50, y=61,00, z=288,50], wk['Creeper'/152207, l='MpServer', x=250,50, y=12,00, z=223,50], rb['Experience Orb'/153280, l='MpServer', x=177,66, y=72,25, z=224,66], wk['Creeper'/152687, l='MpServer', x=108,09, y=11,00, z=176,69], rb['Experience Orb'/153281, l='MpServer', x=176,38, y=72,25, z=225,16], ww['Skeleton'/152068, l='MpServer', x=126,50, y=26,00, z=142,50], ww['Skeleton'/151990, l='MpServer', x=151,41, y=18,00, z=168,84], xb['Zombie'/152811, l='MpServer', x=239,50, y=35,00, z=237,50], ww['Skeleton'/153777, l='MpServer', x=188,34, y=26,00, z=224,50], xb['Zombie'/152812, l='MpServer', x=242,50, y=35,00, z=233,50], wy['Spider'/153063, l='MpServer', x=191,03, y=53,00, z=196,16], ww['Skeleton'/153549, l='MpServer', x=162,50, y=42,00, z=173,50], up['Bat'/151276, l='MpServer', x=126,69, y=12,10, z=142,94], up['Bat'/151279, l='MpServer', x=126,75, y=12,10, z=142,88], uz['Pig'/57, l='MpServer', x=155,06, y=68,00, z=146,59], uz['Pig'/56, l='MpServer', x=149,47, y=70,00, z=150,13], ww['Skeleton'/151971, l='MpServer', x=171,50, y=45,00, z=186,50], uz['Pig'/62, l='MpServer', x=148,50, y=70,00, z=271,31], wk['Creeper'/153527, l='MpServer', x=159,50, y=48,00, z=165,50], xb['Zombie'/152571, l='MpServer', x=151,50, y=30,00, z=199,50], xb['Zombie'/152570, l='MpServer', x=155,50, y=30,00, z=196,50], vv['item.tile.wood.oak'/150475, l='MpServer', x=245,13, y=63,13, z=280,41], ww['Skeleton'/153529, l='MpServer', x=246,91, y=23,00, z=220,50], vv['item.tile.wood.oak'/150470, l='MpServer', x=249,63, y=63,13, z=285,44], xb['Zombie'/152562, l='MpServer', x=141,38, y=27,00, z=182,69], vv['item.item.rottenFlesh'/153263, l='MpServer', x=179,16, y=72,13, z=221,31], xb['Zombie'/153145, l='MpServer', x=138,50, y=26,00, z=182,50], wk['Creeper'/153269, l='MpServer', x=168,50, y=38,00, z=154,31], uz['Pig'/93, l='MpServer', x=176,69, y=70,00, z=301,50], wk['Creeper'/150214, l='MpServer', x=237,50, y=65,00, z=182,50], wk['Creeper'/151040, l='MpServer', x=172,50, y=44,00, z=185,50], xb['Zombie'/153276, l='MpServer', x=192,50, y=39,00, z=230,50], rb['Experience Orb'/153279, l='MpServer', x=174,81, y=72,25, z=221,66], vv['item.tile.wood.oak'/150482, l='MpServer', x=250,03, y=64,13, z=283,19], ww['Skeleton'/153143, l='MpServer', x=142,56, y=28,00, z=182,00], wx['Slime'/151784, l='MpServer', x=157,31, y=13,00, z=177,31], wl['Enderman'/153010, l='MpServer', x=174,50, y=21,00, z=148,50], xb['Zombie'/151789, l='MpServer', x=164,50, y=25,00, z=212,50], xb['Zombie'/151781, l='MpServer', x=229,50, y=58,00, z=159,50], wk['Creeper'/153832, l='MpServer', x=188,50, y=12,00, z=155,50], xb['Zombie'/153697, l='MpServer', x=165,28, y=41,00, z=181,94], va['Sheep'/119, l='MpServer', x=225,09, y=64,00, z=194,94], xb['Zombie'/153696, l='MpServer', x=124,50, y=28,00, z=291,50], wk['Creeper'/153834, l='MpServer', x=186,30, y=12,00, z=154,47], xb['Zombie'/152526, l='MpServer', x=190,50, y=50,00, z=192,50], wk['Creeper'/153835, l='MpServer', x=193,03, y=12,00, z=158,41], xb['Zombie'/153698, l='MpServer', x=161,94, y=41,00, z=176,84], wk['Creeper'/153836, l='MpServer', x=191,50, y=12,00, z=160,50], xb['Zombie'/149846, l='MpServer', x=243,06, y=64,00, z=288,50], uz['Pig'/127, l='MpServer', x=237,50, y=65,00, z=159,84], up['Bat'/153240, l='MpServer', x=146,56, y=15,10, z=192,13], wk['Creeper'/150127, l='MpServer', x=179,25, y=72,00, z=233,86], xb['Zombie'/153348, l='MpServer', x=131,50, y=57,00, z=301,50], ww['Skeleton'/153830, l='MpServer', x=213,50, y=50,00, z=276,50], xb['Zombie'/151917, l='MpServer', x=161,50, y=46,00, z=163,50]]
Retry entities: 0 total; []
Server brand: vanilla
Server type: Non-integrated multiplayer server
Stacktrace:
at biy.a(SourceFile:284)
at azc.b(SourceFile:1949)
at azc.e(SourceFile:713)
at net.minecraft.client.main.Main.main(SourceFile:103)
-- System Details --
Details:
Minecraft Version: 1.7.1
Operating System: Windows 7 (amd64) version 6.1
Java Version: 1.7.0_45, Oracle Corporation
Java VM Version: Java HotSpot(TM) 64-Bit Server VM (mixed mode), Oracle Corporation
Memory: 76613296 bytes (73 MB) / 251133952 bytes (239 MB) up to 954728448 bytes (910 MB)
JVM Flags: 2 total; -XX:HeapDumpPath=MojangTricksIntelDriversForPerformance_javaw.exe_minecraft.exe.heapdump -Xmx1G
AABB Pool Size: 10503 (588168 bytes; 0 MB) allocated, 2 (112 bytes; 0 MB) used
IntCache: cache: 0, tcache: 0, allocated: 13, tallocated: 95
Launched Version: 1.7.1
LWJGL: 2.9.0
OpenGL: ATI Radeon HD 4800 Series GL version 3.3.11672 Compatibility Profile Context, ATI Technologies Inc.
Is Modded: Probably not. Jar signature remains and client brand is untouched.
Type: Client (map_client.txt)
Resource Packs: []
Current Language: English (US)
Profiler Position: N/A (disabled)
Vec3 Pool Size: 1624 (90944 bytes; 0 MB) allocated, 18 (1008 bytes; 0 MB) used
Anisotropic Filtering: Off (1)
Already mentioned this in the edit of my last comment, but for everyone with the issue: disable mipmapping in the video settings will prevent this issue.
It off course still needs to be fixed, mipmapping definitely makes the game a lot prettier.