ATI AMD Display Driver Install: Windows version does not support this operation
After you try to install an updated ATI Catalyst software for your graphics card, you may find that the display driver setup failed. Some people suggest a complete removal of all AMD software and drivers, before the setup of a new version. You may do this and still face the same problem as before, AMD giving you the warning “Driver Install: Windows® version does not support this operation”.
Do not uninstall and re-install anything, and of course do not format your disk! 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.