Try this instead as it's from Intel, if lucky the other file was corrupt (even though it's unlikley)
http://downloadcenter.intel.com/Prod...=1044&lang=eng
You are running old drivers, thats for sure. Now the issue isn't the type of card, i've played DF2 with alot older intel cards then that without any issues and the issue is either that the card is broken or a driver issue, and it defenetly seems to be the last. Don't give up yet
Installing another card is a thing to test but if you can't get the drivers for your card uninstalled you will have issues with any other card aswell as the drivers for built in Gcards should not be installed when using third party graphics cards.
EDIT: One thing I thought of, have you tried to go into safe mode and uninstall the drivers? Windows might go nuts (it does 99.99% of the time) when you try to uninstall graphics drivers for the only card being used, going into safe mode should fix this as it uses a default driver thats not associated with Intels cards specificly, it's a generic driver that is used so that you can see what you're doing installing windows and the like. It's worth a shot
If it's uninstalled you should have a lower resulotion when starting windows normaly, normaly 800*640. It should look uggly and scrolling a website should give you issues (stops, slow mostions etc).
Then install the drivers in the link I pasted in this post, remember to chose the correct version of windows in the dropdown list.