Do you mean "update the driver?"
Okay first off, there is no specific conflict between an ATI chipset and KOTOR II or games in general. Always make sure your drivers are up to date. I do not use standard drivers, I use the Omega's. Nevertheless, I'd advise you install the default ones.
Download and run CCleaner. Once the program is installed, run it and click "run cleaner". This may take awhile depending on whether or not you delete temp files. After that, click on the little jumbled box on the side called "issues". Click on "scan for issues", and when the program gives you the option whether to delete a certain registery entry; click "fix all issues".
As an added bonus, CCleaner will show your computer's basic information at the start. For example "AMD X2 4400+ GeForce 7950GT 2GB RAM". Please post what you have on the forum.
Once that is done, download and install new radeon drivers. Here is a link
If that does not help, try erasing all remants of either KOTOR from your pc and continue posting here.
Sigh, I shall try to help.