Are you using an anti virus? Since you get the full screen when you install the driver from the recovery CDs proves that the HW is fine and it is a matter of driver alone. What I would have done if I were you, I would have reinstalled the Windows from the Recovery CDs as I feel that some virus is troubling you. When you install, it works, but after a reboot, the virus takes over and you are back to square one. So, friend, Reinstall Windows after a backup of your data. Back up to CD/DVDs.
I feel that it a is a virus problem and the anti virus that you have installed is not able to handle this one. Reinstalling the Windows will format the HDD and thus remove the virus. Only, you will have to reinstall all the progs that you had installed besides the Windows. Including MS Office. That is why I suggested a backup of your data. Specially the My Document folder. Your LCD is fine as you say that when you installed the drivers the whole LCD worked fine till you rebooted, and that is when the virus got into action once again and occupied the screen. No anti virus is perfect. So, there are times when you have to take hard decisions.
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Yes, I used to repair PCs for a living, but am not familiar with Netbooks. The LCD is intact - not so much as a scratch or missing pixel.
It sounds like your video cable may be loose or damaged or the video chipset or lcd screen may have taken some sort of damage. If you are tech savy we can give you instructions on how to check the lcd video cable. Let us know.
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