I would think that 1024x768 was the resolution setting for the screen.
Assuming you're using XP then go into Control Panel, Advanced, Performance settings and tick the 'smooth edges of screen fonts' option. If that doesn't help then try Clear Type click here
If that also doesn't help then uninstall the ATI drivers you recently installed and install the previous version. You could also try a System Restore to a date before you upadted the drivers.