Reboot it?
If your video card driver crashes but windows manages to survive it, it'll use that legacy 640x480@16bpp mode.
Tried rebooting it.
Could the second part, the part about the crashing, be caused by a large surge of electricity, going through it?
My dad tried to hook up my computer and put the power cord into the wront place... fried the computer, but it was fine until a little while ago...