I have the 120gb model and one day I was installing mint linux and the same thing happen, I figgered that the problem was the bios not the videocard so i went to acer and flashed the bios. here the link on how to do it macles.blogspot.com/2008/08/acer-aspire-one-bios-recovery.html
Acer Aspire One BIOS Recovery
you may need a usb key