I just built a computer, it is running win 7 home premium 64bit. I installed the mobo drivers already. I have 2 pci-e slots.
My gpu is an xfx radeon hd 5870.
So I installed the display driver for my card, restarted and nothing changed. I look into the device manager and windows was still saying generic video card detected.
So I installed the catalyst control system driver. But after I did that when I restarted the computer, windows was displaying a screen that was all pink, and fuzzy. everything unreadable. Works fine in safe mode. In safe mode I see that it is now showing that the gpu is in, and that the drivers are up to date.
I had similar problems :S I got my new card, it was fine until I started to play NFS Underground... It ran normally for about 10 minutes, but after that the monitor got black, and the video card couldn't send picture to it, so I had to reset...
From that point, I experienced the same things that you said: display is confused, pink rectangles, etc.
Safe mode was ok...
Finally I found out that for some reason, the Catalyst Control Center's startup causes the display-problem, so try to disable its auto-run from safemode... however, this is temporary solution, I had to reinstall my Windows to fix this problem (now, CCC can run and display is normal)