Hi everyone - My sympathies for your current hardware/software issues. I too have lived the nightmare of trying to find those certain magical drivers that would solve all the issues with the ATI Radeon 345m in my laptop (Sony Vaio PCG-K25, Windows XP).
Even after doing a complete format and restore (more than once), and using the original drivers that came with my laptop, graphics were displaying with missing areas/gaps/gashes and sometimes weird video patterns. In addition, the drivers were totally non-responsive to gamma adjustments.
DirectX didn't help either, nor Windows updates, etc. So, I then tried many versions of many drivers, (including actual ATI drivers force-installed using Patje's Modtool and alternative drivers like Omega and zeroPoint) but was still having problems - some drivers would correct some issues, while not correcting others.
With some versions I tried, the standard graphics issue would be fixed and I could adjust gamma, but 3D graphics would be extremely jagged (due to Direct3d being unavailable for some reason) and/or gamma adjustments would be reset when I would exit 3D mode.
FINALLY and unbelievably, I found an oasis in the desert of ATI driver dispair, a set of drivers that corrected ALL of the issues! And it was (que the fanfare): version 2.6.25a of the Omega drivers! The trick was finding the exact version that solved all the issues I was having and luckily, there was one. It just took having to download and install all the versions, up to the latest one that worked (glad I have broadband)!
So, hopefully if you're having this or a similar problem this will help, because I'm all too familiar with the frustration. Good luck!
Here are the links:
Omega Drivers Multiple Versions Download Page (scroll down to find version 2.6.25a):
http://www.ngohq.com/home.php?page=Files&go=cat&dwn_cat_id=14
http://www.omegadrivers.net/