Problem solved with the above workaround:
1. downloaded from HP support site, drivers for windows 7 - 64 (sp53234.exe) and run it to create folder.
2. device manager > updated the driver (browse computer for driver software > browse and point to folder sp53234>packages>drivers>display
3. during driver update process, there was the blue screen error saying about atikmdag.sys.
4. after restart, windows were not starting because of the the blue screen error about atikmdag.sys
5. i got into safe mode and:
Step a: C:\Windows\System32\Drivers found atikmdag.sys & atikmpag.sys and copied to desktop
Step b: C:\sp53234 folder and found the file "atikmdag.sy_" and "atikmpag.sy_ "and copied to desktop.
Step c: opened cmd.exe (with admin rights), changed the directory to desktop and typied expand.exe atikmdag.sy_ atikmdag.sys. & expand.exe atikmpag.sy_ atikmpag.sys
Step d: copied atikmdag.sys & atikmpag.sys from desktop to C:\Windows\System32\Drivers
5: restarted computer and the problem resolved.