BC I note your comments re resolution but i felt that 480/640 16 bit might be too low.
Oh dear, I seem to have completely forgotten the original issue regarding resolution, and got caught up in a digression on VGA->Television.
You're original 640x480 at 16-bit issue is what happens when there is no Device driver loaded; Now, a
loaded device driver is different in concept from an
installed device driver; basically, you could install drivers for anything, even if you didn't have the device, but unless you actually use the device and Windows recognizes it and goes "hey, cool, I have a driver for that" it won't be loaded, and if windows says "hey, driver, load now!" (and calls the driver loading function) the driver generally goes "alright, what am I dealing with here?" and goes to look at the device for which it is designed; if it doesn't find one it usually just breaks out of the initialization routine and tells windows it refuses to load, resulting in a message of the form "This device cannot start" or something to that effect. As you've mentioned yourself you encounter the Exclamation Point on the driver in Device manager. This is the key to the problem. If I remember correctly you have also attempted reinstalling the Video Driver as well; at this point it would seem prudent to investigate why the driver is refusing to load; Thus the reasoning in my last (non-digressional) post suggesting viewing the details in Device Manager; Basically, the Exclamation mark says "hey, there's a problem, I couldn't load this device driver for whatever reason" that actual reason is described in the Properties for the device; With any luck this will give you- and us in turn - a clue as to why the driver is refusing to load and thus perform it's function. It could be a resource conflict- a corrupt driver, or the driver could be refusing to load entirely which usually means you have the wrong driver altogether.
Actually, come to think of it, calling Device Manager Device Manager is a misnomer- what the applet should be called is
Driver Manager.