Hi have been an ATi user for some years now and have never had a problem. You may want to try the following.
The correct procedure for uninstalling an old Ati Driver is as follows;
Under Control Panel/Add Remove Programs
1. Uninstall the Catalyst Control Centre first.
Do not reboot
2. Uninstall the Ati Display Drivers
Do not reboot
3. Uninstall the Ati Software removal utility (this will open up a new window asking you if you want to remove ALL Ati Driver info. Select YES)
4. Reboot your PC.
5. Make sure you have Microsoft .NET Framework 2.0 installed (Windows Update to check this one)
5.Install your Catalyst Software Suite. Current version 7.8 (35.4MB) from here
http://ati.amd.com/support/drivers/xp/radeonx-xp.html
6. Reboot and you should be good to go.
JJM