|"Is it the driver or directX responsible for the mess?"|
No, it's just a horrible laptop. Weak Celeron CPU plus extremely weak Mirage 3 graphics does not make a good gaming laptop. Did it actually come with Windows 7 or did you install it?
SiS Mirage 3
"I've previously used a celeron 1.3GHz ,512MB ram ,64MB intel GMA,on xp and most games performed considerably well"
You must have very low gaming standards.