Go online and then try the following:
1. Open xterm (or some other terminal client)
2. Type su and press return/enter
3. Type the root password (default on the LiveCD is root) and press enter/return
4. Type tazx and choose Install or Reconfigure xorg with the box that pops up.
5. Wait for it to download all the lists and then pick ati from the box and click OK
6. Allow it to download the ati-drivers and then close the box.
7. Type tazhw --detect-pci and allow it to detect everything.
8. Type tazpkg get-install xorg-xrandr
9. Type wget http://trixarian.za.net/downloads/lxrandr.tazpkg
10. Type tazpkg install lxrandr.tazpkg
11. Go to "Red spider" button --> Preferences --> Monitor settings and set the resolution to what you want.
12. Alternatively go tazpkg get-install mesa-dri-ati for mesa (OpenGL) support for games and applications.