What is the system definition you are using? The update does specify that it is for a MacPro3,1 or MacPro4,1 or MacPro5,1. Have you tried changing your system definition to one of those?
Is this the proceedure you are referring to on the additional information tab of the driver update page?
http://www.nvidia.com/object/macosx-304.00.00f20-driver.html
To uninstall this driver and restore your original Mac OS X vv10.8.1 driver, follow the steps below:
STEP 1: During the installation process, a backup archive of your current drivers will be created. If for any reason you need to uninstall the 304.00.00f20 driver, the “NVIDIA Driver Restore.mpkg” is located in /Library/Application Support/NVIDIA.
IMPORTANT: Do not move this package from its default location. Doing so will invalidate the uninstall/restore process. Also, this process is only valid with Mac OS X vv10.8.1. Installing any newer version of the OS over this driver will also invalidate the uninstall/restore process.
STEP 2: After locating the NVIDIA Driver Restore.mpkg archive, double-click on the package. You will be guided through the driver restoration process. Click Continue after you read the Welcome screen.
STEP 3: Click Install on the Standard Installer screen. You will be required to enter an Administrator password to continue.
STEP 4: Click Continue Installation on the Warning screen: The Warning screen lets you know that you will need to restart your system once the installation process is complete.
STEP 5: Click Restart on the Installation Completed Successfully screen.
ALTERNATE METHOD – If for any reason you are unable to boot your system to the desktop and wish to restore your original Mac OS X vv10.8.1 driver, you can also do so from “Single-User” mode:
STEP 1: Restart your Macintosh computer and hold down the “Command” (apple) key and the “s” key to boot into “Single User” mode.
STEP 2: When the system finishes loading to a command prompt, type the command “NVIDIARecovery” (no quotation marks), and hit the “Return” key.
STEP 3: The 304.00.00f20 driver will be uninstalled and your original Mac OS X vv10.8.1 driver will be restored. The computer will then reboot automatically.
-v is just verbose mode. It has no effect on what happens when you boot, it just lets you know what is happening.
npci=0x3000 is a commonly required boot flag. It is perfectly normal for that to be required.
Have you tried re-installing OSX?