I had the almost the same problem but with ATI Radeon Xpress 1200 Series
(motherboard), Hardware drivers app got in black and white mode(not
responding) and it stills this way, so I restarted the machine, and then
tried again to install the driver using hardware driver app, and the
same happened again, and this way so many times, after an hour trying
finally the driver installed, but it doesn't notified me about the
process and not notified me that the process was successful, simply the
hardware driver seems not to work with ATI but always installs the
driver.

finally I checked the xorg.conf and it seems to be ok

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On upgrading to Intrepid Ibex unable to activate nvidia restricted driver using 
the "Hardware Drivers" app
https://bugs.launchpad.net/bugs/278665
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