Try consulting system-error reports, possibly it points you to the source of the problem, e.g. 'ati***.ax/xx' etc. failure. Look around the forum for
a. CLEAN re-install of ATI-drivers. It is REALLY VERY important to do that meticulously 'by the book.'
b. IF you have re-installed very thoroughly, the next problem might be some ATI-driver-component called 'atioglxx.dll', that is present in the WDM-drivers of Catalyst 6.5, but changed in the recent ones. Try looking for that file in the .cab-file of the 6.5 WDMs and put it into 'system32'-directory in 'Windows'-folder of your windows-installation - again, for more information on this point, look around the forum.
Good luck - and perhabs just stay away from ATI MMC 9.16 altogether. It really is not worth the trouble... Alternatives: BeyondTV, ChrisTV, Intervideo WinDVR 3, MediaPortal (Highly recommended!!!OpenSource, very good forum-support, extremely feature-rich, professional design and setup, and great quality output - if the system 'carries' the load. System requirements: with hardware-encoding support of the card, MediaPortal requires about 1.8 GHz CPU-power, if the card 'only' does software-encoding, you would need more power, like 2.4 GHz or higher.
http://www.team-mediaportal.com/)
So long!