From what I've seen, video driver installation on Windows 7 systems can be problematic, particularly in the case of installing the most recent drivers. BSOD's, lockups, TDR errors, and video corruption issues are not uncommon with new video drivers.
It can be useful to visit the AMD Forums where such driver issues and their resoltutions are discussed. If problems arise with the latest version of a video driver, it is sometimes necessary to backrev to an earlier version to obtain stability.
Sometimes it involves a complete uninstall of the current driver as well as using utilities such as Driver Sweeper, ATI Crap Cleaner, and CCleaner to remove driver remnants that may cause problems with a new driver installation. I've also seen it helpful to install drivers after booting into Windows Safe Mode to disable other running drivers (particularly Antivirus) that may interfere with your video driver installation.
Here is an article from AMD discussing installation of the Catalyst Software Suite on Windows 7: http://support.amd.com/us/kbarticles...tWindows7.aspx
I think it would also be useful to further troubleshoot the BSOD you received.