1. Reinstall windows 7 again
2. Install all vcredist packages (there are 8 at least)
3. Install .NET 3.5 and 4.5
4. Install all updates from windows update, except for the video card driver, you should hide and disable that one
5. Try installing Catalyst again. Don't use express install, and check out the component selection dialog. The display driver and CCC/VECC should be there. If they're not, don't proceed but post here.
Reboot after each step and whenever the system asks you to do it.
CPU: AMD Phenom II X4 810 @ 3120MHz | RAM: Kingmax 2x2GB DDR2 800 @ 833MHz| MoBo: MSI K9A2 CF v1.0 (BIOS: 1.D)| GPU: Asus HD 6850 1024MB (DirectCu) @ 835/1135MHz | Display: L24FHD | PSU: PC Power & Cooling Silencer 750 Quad | OS: MS Windows 3.11 Pro x64