windows 7 & catalyst 10.1 problems...

[himadri_sm]

so i installed windows 7 ultimate & then installed all the drivers...including the 10.1 drivers with catalyst control center....the installation seemed fine but after i restarted my system i got this error message- "no ATI graphics driver is installed or the graphics driver did not install properly"....the AERO theme is not working..i get this error when i try to enable AERO- "The current video card may support Aero with a driver that is compliant with the Windows Display Driver Model (WDDM). Contact the manufacturer of your computer or video card for a WDDM-compatible driver."

if i try to update my driver using device manager > update driver software, i get a message saying my device driver is up to date...

here is the installation log-
Catalyst™ Install Manager
Installation Report
02/02/10 00:22:28


Hardware information
Name ATI Radeon Graphics Processor
Manufacturer ATI Technologies Inc
Device ID 0x9442
Vendor ID 0x1002
Class Code 0x030000
Revision ID 0x00
Subsystem ID 0x0000
Subsystem vendor ID 0x0000
Other hardware

Existing packagesCatalyst Control Center
ATI Catalyst Install Manager
ATI Display Driver
Microsoft Visual C++ 2008 SP1 Redistributable
Catalyst Registration

Packages for install
ATI Catalyst Install ManagerFinal Status: Success
Version of Item: 3.0.758.0
Size: 20 Mbytes
ATI Display DriverFinal Status: Fail
Version of Item: 8.690.0.0000
Size: 90 Mbytes
HDMI Audio DriverFinal Status: Fail
Version of Item: 7.11.0.7700
Size: 1 Mbytes
AMD Drag and Drop TranscodingFinal Status: Success
Version of Item: 1.0.19
Size: 1 Mbytes


Other detected devices

Manufacturer ATI Technologies Inc
Device ID 0xaa30
Vendor ID 0x1002
Class Code 0x040300
Revision ID 0x00
Subsystem ID 0xaa30
Subsystem vendor ID 0x0000


Error messages
Driver Install: Windows® version does not support this operation
Driver Install: Windows® version does not support this operation
Driver Install: Windows® version does not support this operation
Driver Install: Windows® version does not support this operation

My system Specs are- ASUS P5KC m/b,
intel q9300 @2.5Ghz
ATI HD 4850,
3Gb of 800Mhz DDR2 RAM,
Windows 7 Ultimatei tried running the driver installer in compatibility mode & selected windows vista from the list of operating systems but that did not work..& neither did reinstalling the driver(3 times)..Please help me with a solution..