aparantly Steam installed a driver that is not working with your Graphics card, SHAME ON THEM! they don't know what they are doing, those idiots!
what you should do is ( if you don't see anything on your monitor cus blurry?) boot the computer in failsafe mode, depending on OS it's different but it should be one of the F keys so just press all of them at boot LOL I think xp is F8, or could be F1, F2,F3,F4, try press all of those real fast at boot, but not all at once, more like a drummer, LOL RATATATATATA you could allways use just 1 key at the time but be prepared to boot 12 times, my way is quicker if you don,t know which key is fail safe, OK, it's allways the last one you try, LOL then when you finally have booted to fail safe mode, go to the device manager and uninstall the driver, then reboot the computer, it will then install the previous driver, Steam is not a good place to download drivers from, you should try Windows update, they provide the newest drivers too and easyest to install, or you can go to the ATI site,