Why can't I install new ATI Drivers?

[Prince of China]

Everytime I try to install a new ATI Catalyst driver, I install it successfully but when I restart, my resolution goes to 1280x1024 and I can't switch it any higher and I get an error message which says: The ATI control panel doesn't work because I have no driver installed, the only driver that works is the one included on a disk I got with my new computer and it's not the latest.
If it helps

P4 1.8 Ghz
512 MB DDR ram
ATI Radeon 9600 PRO 128MB ram