first of all put English Language of Steam. coz on other languages it may happens some shits. hm.. i have windows 7 maximal. and dm works even without compatibility.
advice: download the latest drivers for your vid card.
if that is not gonna helps -> go to the shop and buy the video card(like nvidia..9 series)
i have the same problem(with colors(like pink letters) at greetings of windows7 . then it was auto reboot..and then circle over and over) my vid card were 8500 gt. and on of windows site i read that my card is ok for windows 7 but This is Lie ^^ sure my card maybe got broken.. but this is unbieveble, coz on XP there were ok.
so i bought 9600 and now everything is ok