Kernel Mode Not Working?

Check to make sure you have the correct drivers installed for your card. List specs.

Also, does this kernel mode problem have an effect on the efficiency of my computer / gpu? Why can these programs not run properly without kernel mode working?

Also, why can I not find a simple way to fix this problem? Is something hardware related faulty? Kernel mode is run through the OS or processor?

I swore I had downloaded that package already, but I went ahead and uninstalled/reinstalled the catalyst software and the same problem persists; "Could not load kernel driver" then "error loading the device driver".

Where can I see what version my driver is? Which line is it in the dxdiag that I posted? Here is the new dxdiag (after uninstall/reinstall)
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System Information
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Time of this report: 9/29/2009, 17:24:49
Machine name: SCHOFF-PC
Operating System: Windows 7 Ultimate 64-bit (6.1, Build 7100) (7100.winmain_win7rc.090421-1700)
Language: English (Regional Setting: English)
System Manufacturer: Gigabyte Technology Co., Ltd.
System Model: GA-MA790X-UD4P
BIOS: Award Modular BIOS v6.00PG
Processor: AMD Phenom(tm) II X3 720 Processor (3 CPUs), ~2.8GHz
Memory: 4096MB RAM
Available OS Memory: 4094MB RAM
Page File: 1554MB used, 6632MB 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: 6.01.7100.0000 32bit Unicode

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DxDiag Notes
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Display Tab 1: No problems found.
Sound Tab 1: No problems found.
Sound Tab 2: No problems found.
Input Tab: No problems found.

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DirectX Debug Levels
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Direct3D: 0/4 (retail)
DirectDraw: 0/4 (retail)
DirectInput: 0/5 (retail)
DirectMusic: 0/5 (retail)
DirectPlay: 0/9 (retail)
DirectSound: 0/5 (retail)
DirectShow: 0/6 (retail)

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Display Devices
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Card name: ATI Radeon HD 4800 Series
Manufacturer: ATI Technologies Inc.
Chip type: ATI display adapter (0x9440)
DAC type: Internal DAC(400MHz)
Device Key: Enum\PCI\VEN_1002&DEV_9440&SUBSYS_E114174B&REV_00
Display Memory: 2809 MB
Dedicated Memory: 1018 MB
Shared Memory: 1791 MB
Current Mode: 1600 x 900 (32 bit) (60Hz)
Monitor Name: Acer X203H
Monitor Model: Acer X203H
Monitor Id: ACR0075
Native Mode: 1600 x 900(p) (59.978Hz)
Output Type: HD15
Driver Name: atiumd64.dll,atidxx64.dll,atiumdag,atidxx32,atiumdva,atiumd6a.cap,atitmm64.dll
Driver File Version: 8.14.0010.0697 (English)
Driver Version: 8.650.0.0
DDI Version: 10.1
Driver Model: WDDM 1.1
Driver Attributes: Final Retail
Driver Date/Size: 8/13/2009 21:49:38, 4629504 bytes
WHQL Logo'd: n/a
WHQL Date Stamp: n/a
Device Identifier: {D7B71EE2-D700-11CF-4276-1EC1A1C2C535}
Vendor ID: 0x1002
Device ID: 0x9440
SubSys ID: 0xE114174B
Revision ID: 0x0000
Driver Strong Name: oem11.inf:ATI.Mfg.NTamd64.6.1:ati2mtag_R7X:8.650.0.0ci\ven_1002&dev_9440
Rank Of Driver: 00E62001
Video Accel: ModeMPEG2_A ModeMPEG2_C