You don't need the ATI drivers to change the resolution to what your screen can handle. Just go to System ---> Administration ---> Display
type in your root password, then click on the hardware tab ----> configure button, then select the lcd or crt with th maximum resolution that your monitor can handle. Press OK and OK again to exit, it will give you a note that these settings will be applied next time you login.
(Also you can give the video card type selection a shot, it might be a tad better than the VESA driver, however you won't be getting 3D acceleration from it)
Logout then Login again, go to System ----> Preferences ---> Hardware ------> Screen Resolution, then change your resolution to the proper one.