Sorry to hear about your troubles. Just about every laptop graphics chipset that I've owned has had teething troubles early on with Linux. There are a number of threads on Google posted by people with your problem (same video chipset, installing RH9), so there's probably nothing inherently wrong with your machine. :-)
I believe that you're right in thinking that it's probably your display drivers, whether they've been incorrectly probed and autoconfigured, or incorrectly identified. The file you're looking to modify is most likely XF86Config (or XF86Config-4) in /etc/X11. Take a look for valid XF86Config files for your laptop on the net. If you need help modifying it (i.e. if you can't find a whole usable file for your computer), let me know.
A fellow installed various distros and OSs on his Gateway 350X, which has a similar graphics chip (an integrated 852GME). He seems to have had numerous issues getting the video card recognized, but solved the problems. He provides contact info and may be a good resource for configuring your gear.
Sorry -- gotta get back to work. Hope this helps a bit. Get back with questions or if you need more info.