What you describe sounds correct in your installation method. What I did was I just select the partition, DELETE it, and then set a mount point. NOt sure if this makes a difference because Mandriva still formats it anyway.
As for the ATI module installation failure, don't worry about that because even on my previous desktop and current laptop, the ATI modules always fail to load, but it still booted into the GUI.
And when you say a "blank" screen, do you literally mean that? or does it kick you out to the terminal? I know during the initial booting up of Mandriva, it does take longer. Next time it's booting, go in VERBOSE mode by pressing ESC to see what's going on.