I have now solved my problem, and like everyone has said, it appeared I did indeed need to update my graphics card drivers which I thought I had done. It turns out Windows felt that the 2006 drivers were more up-to-date than the 2007 drivers on my computer so I had to install the newer drivers manually and suprise suprise, everything works fine!
So my advice to you, Jelly (especially as you are also trying to use an ATi card under Vista) is to check the date of the drivers you currently have installed for your card by going to Start > Control Panel > Personalization (Appearance and Personalization > Adjust Screen Resolution) > Display Settings > Advanced Settings > Properties > Driver, and check the Driver Date and Version to see if it is the latest available. If they aren't the latest then I can tell you what to do next ;)