Well I am using 5.7 and now it is working perfectly with a 1280 * 800 widescreen resolution:
Solution: Do not start (otherwise quit) ATI Tray Tools (I am using 1.0.3.720). This seems to be the source "of all evil" with GW and my config. NOT the driver version.

Otherwise a good tip, as for any other game with this mobility chip, is to turn off all shading effects (vertex shader - this chip doesn't have one I believe) to get acceptable to good, if not even sometimes great frame rates.
