You can actually ignore the warning and just go ahead and upgrade to windows 7 and after the upgrade is done, download the latest ati drivers from ati's website, uninstall the old catalyst control center through the control panel, and after the reboot install the new ones
Try Grumpy's suggestion of removing from control panel first. But, if this does not work you can try removing/uninstalling it from context menu. To do this open regedit and go to KEY_CLASSES_ROOT\Directory\Background\shellex\Cont extMenuHandlers\ACE and remove the key named “ACE”
PS - Good job for running the Upgrade Advisor! Many people upgrade without doing so and then regret it later.
Have fun with Windows 7! Cassandra Microsoft Windows Outreach
an easy fix would be to run REVO uninstaller. its free and will remove all leftover registry entries and leftover files. Just choose moderate or advanced uninstall. Quick and easy.