The are some older motherboards where you must flash a new BIOS version to avoid problems with older AGP boards and ATI cards
I strongly advise against flashing the BIOS unless you're absolutely 100% certain that you'll fix the problem in doing so.Get it wrong - bye bye motherboard.
Anyhoo...
Have you installed the drivers that came with it on a CD? Or downloaded the latest ones? I ask because the 7.2 Catalyst drivers were complete crud, to the extent that I went back to Nvidia.
Also, I had a problem with my ATI Radeon 9600 whereby nothing that required DirectX hardware would work. Turned out there was a big lump of dust jammed in the AGP slot. So I'd also make sure its seated properly if the latest drivers don't help.
Should also upgrade to XP SP3 ;)