Aha! i ran driver sweeper, rebooted, installed new Intel AND ATI drivers, rebooted and that seemed to do the trick. It still doesn't recognize ATI card in the launcher, but it can run on all high settings, so i suppose that isn't a problem. Here are the specific driver downloads i used for Windows 7 64 bit x86:
Intel :
http://downloadcenter.intel.com/Detail_D...pe=Drivers (I don't actually know the specific model of my integrated card beyond that it is Intel HD Graphics Family, according to device manager)
ATI :
http://www.driverheavendownloads.net/ati.htm (the first download, vista will work for windows 7)
thanks so much for your help, i love amnesia & frictional games. i'm going to go scare the hell out of myself in HD now.