I don’t like working in 16 color 640X480 mode during setup. Is 16-bit the reason why it looks like it's in safe mode, do you think? And installing the graphics driver should fix that? Thanks for your post - I am probably going to be out there later tonight working on the PC.
My information is a little dated, but last time I worked with Windows, if it wasn't sure which video driver to use, it would default back to the absolute basic driver that will display on anything. If, under display settings you can't select higher resolutions or number of colors, the first thing I'd do is install the correct video driver.
For some reason, I know that Windows ME would just lose the video driver every so often and I'd have to go back and reinstall it. No big deal, just annoying.