FPS drops like a stone before game crashes

[HakuroDK]

You might want to tweak the mean time before crash
http://support.microsoft.com/kb/2665946

In all seriousness, I never had that problem with an AMD card, but I DID tweak the driver crash recovery time because I use multiple screens, and one of the key things that crash is video recording while full screen.

Though what you describe is more typical of WiFi dropping. But of course would only happen if you're on WiFi. A similar problem is "roommate/family member is downloading/uploading stuff" or as you said Steam.

Generally you want to "cap" network settings on all devices that have uncapped bandwidth usage, this includes steam. Otherwise they will just max out the line. This is more typical of sub-25Mbit lines.

Not a bad suggestion to cap Steam. I might give that a try.