I don't know if anyone is still following this thread but...
I had the same problem. I fixed it by loading up the Video drivers from I-hacked.com. Specifically, I did the following:
1. Right clicked on blank space on the desktop and chose Properties.
2. Clicked on Settings tab, then the Advanced button.
3. Clicked on the Video Adapter tab, and choose to reinstall drivers. I pointed to the folder where I put the I.hacked drivers and installed them.
THEN I went into display properties and changed the resolution to
"Change the 'moniter' to: Laptop Display Pannel (1024 x 768)
Change the 'Colors' to: High Color (16 Bit)
Then change the 'Screen Area' to: 800 x 600"
This worked for me, but I will be happy to answer questions if it soesn't work for you.