I get the same blue screen problem with my ATI Mobility Radeon X1400...I know what's causing my problem: the drivers.
That and the fact that you are running off a laptop, which means your processor may overheat if you don't do some extra cooling. This could also cause slowdowns and crashes. Your card's specs suggest that it should run the game in any case.
I'm on a Dell, which is a warranty replacement for a previous computer that had major overeating problems (I don't seem to have as many problems with this now). The Dell part means that Ati won't support the drivers, and the warranty replacement means I didn't choose it. I know it's not the best thing ever, but it's not like I can impulse-replace anything, being a college student. The Sims is the only thing I really ever have a problem with. I only have one computer, after all.