I was able to get my new VisionTek Radeon HD 7850 video card to work fine on another Windows 7 machine, so I'm really stumped.
On both computers, I went through the same process. Disable and remove the driver for my original video card. Install the 7850 and then download the AMD automatic driver detect program. Download the indicated driver, and run the install program. On my problem computer (specs below) the Catalyst program installs everything fine except for the driver. I get the error message, "Driver Install: Windows® version does not support this operation." I have no clue how to fix this and neither does VisionTek.
OS: Windows 7 Premium Home Version, 64 bit, Service Pack 1.
CPU: Intel Core i5-2300 @ 2.8GHz
Ram: 6 GB
BIOS: American Megatrends P01-A3, Build Date: 2/18/2011
Previous Video Card: 64MB Intel HD Graphics 2000 integrated graphics chip
Thank you for your suggestion. Although I did not mention it, I did disable Norton first.
Below is the answer that finally worked from www.thefreewindows.com. Only difference is that my Device Driver never showed my new card, it just showed "Standard VGA Graphics Adapter", so that's what I selected.
You just have to update your Display Driver manually, but it is very easy. Go to the Windows Control Panel, then to Device Manager; right click the ATI entry and select the Update Driver option. Choose to use a location on the PC, and browse to the ATI support folder just created by the failed setup, usually at C:\ATI\Support\etc.
Windows will update the driver without problems and it will ask you to restart the computer.
Note that you have to let AMD installer finish and give you the “fail” messages, and only then use the Windows Control Panel to update manually the driver. You need to do that, because AMD installer will create the “support” folder that contains the newer driver version.
It seems that, until AMD manages to create a decent installation package, we have to update the display driver manually through the Windows Control Panel, after Catalyst finishes the setup of whatever is able to setup successfully