I have a 4870 myself. If you want to use the 8.12 drivers, you need to run the installer in Vista Compatibility mode. I however, use the 8.12 Windows 7 preview package (linked on their drivers page) and it works flawlessly.
It could also be that you already have the driver update (prerelease WDDM 1.1) from Windows update installed. I'm not sure if that would interfere as I installed the update after I installed the 8.12 preview package.
I'm having similar problems and when it gets to a certain point, it just freezes.
I'm not sure what the problem is, because I was using the Vista 64bit drivers just fine. I'm a big gamer and this problem is already making me twitchy. LOL. Any input would be appreciated.