Windows 7 freezes up with graphics acceleration

I'm having problems with my graphics card, system hard freezes and requires reset button to
continue. Upon reboot, if I disable graphics driver and run in vga mode these hard freezes
no longer occur. But the trade-off is that I have no 3d accelleration, can't play any games.
I have tried ati's catalyst 8.x for vista and 9.x for vista as well as the beta release for
Win 7, all drivers load and appear to work but system will freeze when 3d acceleration occurs,
ie when games load. I have a mobile hard drive tray installed to easily switch out hard drives and this only
occurs when using the Windows 7 installation, I also have Win xp and and Win 2000 on other hard drives and the graphics
work properly with the other systems(same configuration just different os with their respective drivers). I can't help but think it is a driver issue with win 7 and my graphics card. Below is detail from the dxdiag report. Any suggestions
will be greatly appreciated.

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System Information
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Time of this report: 1/29/2009, 19:28:17
Machine name: CHUCKLES-PC
Operating System: Windows 7 Ultimate 32-bit (6.1, Build 7000) (7000.winmain_win7beta.081212-1400)
Language: English (Regional Setting: English)
System Manufacturer: VIA Technologies, Inc.
System Model: P4M266A-8235
BIOS: Phoenix - AwardBIOS v6.00PG
Processor: Intel(R) Pentium(R) 4 CPU 3.06GHz, ~3.3GHz
Memory: 1536MB RAM
Page File: 563MB used, 2807MB available
Windows Dir: C:\Windows
DirectX Version: DirectX 11
DX Setup Parameters: Not found
User DPI Setting: Using System DPI
System DPI Setting: 96 DPI (100 percent)
DWM DPI Scaling: Disabled
DxDiag Version: 6.01.7000.0000 32bit Unicode



Display Devices
---------------
Card name: ATI Radeon HD 3800 Series
Manufacturer: ATI Technologies Inc.
Chip type: ATI Radeon Graphics Processor AGP (0x9505)
DAC type: Internal DAC(400MHz)
Device Key: Enum\PCI\VEN_1002&DEV_9505&SUBSYS_95051002&REV_00
Display Memory: 761 MB
Dedicated Memory: 510 MB
Shared Memory: 251 MB
Current Mode: 1440 x 900 (32 bit) (60Hz)
Monitor: Generic PnP Monitor
Native Mode: 1440 x 900 (59.887Hz)
Driver Name: atidxx32.dll,atidxx64,atiumdag.dll,atiumdva.cap,atiumd64,atiumd6a,atitmm64
Driver Version: 7.15.0010.0163 (English)
DDI Version: 10.1
Driver Model: WDDM 1.0
Driver Attributes: Final Retail
Driver Date/Size: 12/1/2008 15:35:27, 2340352 bytes
WHQL Logo'd: n/a
WHQL Date Stamp: n/a
Device Identifier: {D7B71EE2-D645-11CF-C471-0FB5A1C2CA35}
Vendor ID: 0x1002
Device ID: 0x9505
SubSys ID: 0x95051002
Revision ID: 0x0000
Revision ID: 0x0000
Video Accel: ModeMPEG2_A ModeMPEG2_C