OK, this is getting a bit strange.
1. I have found that if I disable hardware scaling I get a small screen (1024 x768) with a big black border.
2. If I enable hardware scaling and change the laptop screen resolution to match VAs screen resolution before starting VA:
a. If I start VA in full screen mode it ignores the fact that the laptop display is set to 1024 x 768 and expands the display up to 1440 x 900, making the text distorted.
b. If I start VA in windowed mode then switch to full screen once the boot sequence is underway, the screen display is expanded to the maximum size available whilst still preserving the ratios, which is what I used to be able to do before I upgraded the video drivers. This gives a non-distorted display with two small black borders down each side.
Fortunately there is an ATI utility that allows you to change resolutions on the fly with specific apps, so the working setup is only one more mouse click than it used to be!
I am happy that I've got it working again, just puzzled why it now takes a slightly convoluted method to achieve it! Was I just very lucky to have done this before?