I have found a solution for this problem.
The latest ATI drivers DO work, it's just a matter of getting them on your system.
The driver version you need is: 6.14.10.6436
Even 6.14.10.6430 does not work - it must be this version which is the latest.
I got it to work by downloading the driver...
i have this problem with a radeon mobility 9600.
I cannot download the drivers from ATI.com as it requires the manufacturers drivers (from ASUS.com).
I have the latest ASUS drivers installed - driver version 6.14.10.6404.
Is there a fix for this either from EDS or from ATI?