Okay, strange things happen... If I use ATT or RefreshLock and set 640x480 forced to 50Hz it works. Did the driver update break the monitor frequency detection?
The annoying thing is that for now I always have to start a third party tool first to continue playing. :-/
But at least I can continue.
Thanks, LOL. No sorry I'm currently a little pissed at my computer and ATI/AMD in particular. Makes me sloppy when writing.

It might be, that the entries in the conf-file for your monitor and the entries in the inf-file of the graphic card are conflicting (reeeeeeally old problem with Windows). You can manually alter those files, or use in the property window the option, also show not supported resolutions blablabla (just be warned!, you might be able to destroy blablabla ;) )

AFAIR, this will override the monitor settings and me thinks thats where your problem is. (meaning conf not the monitor itself)

If windowed works fine but is small, you may have to either use it on a monitor that has a low resolution set, or set your main resolution low and play in a window. Not perfect but if it works, then it works...