Well, I've gott the same TV, but a Radeon 9800 Pro.
I've always shyed away from keeping Powerstrip on my system since adjusting the picture didn't work well with it. I found that modifying the picture via ATI drivers to work better.
Here's what I do. I'm using a VGA to RGBHV cable (so as to avoid using the dongle and it's restrictions on DVD playback and available resolutions). Fidn and use Karnis's Mits. driver in the long thread about timings (dont know the link off hand)
1) Install ATI drivers (comes up at 640x480 I think)
2) Install Powerstrip
3) Run powerstrip to "add" wanted resolutions (I add 960x540p, 1776x1000i).
4) Upon reboot, uninstall powerstrip, then reboot again
5) Now, go to diplay properties and go to monitor-> list all modes, and pick your wanted resolution.
I found it impossible to remove ALL overscan. 960x540p is what I normally run at while watching SDTV and everything else. I switch it up to 1776x1000i or 1920x1080i for watching HD stuff. Actually, at 960x504p I have underscan on the left and right sides, but a bit of overcan on the top and bottom. It's very tolerable. You could probably fix this if you could go into the service menus of the TV and adjust the overscan (something I know is possible, but I don't know how to do).
I'd like to hear back with how you make out. If you come up with a different approach that works, let me know.
Go PSU Nittany Lions (I went to Penn State - '97)