The problems you described are not endemic to all 9700's -- In fact, the 9700 is very stable with nearly all D3D and OGL games we've tried. We've confirmed some control panel problems, an issue with Battle: 1942 and medieval total war. Some of these items will be fixed in the next driver release.
The problems you are having appear to be systemic to your system. Overclocking or a bad OS/Driver install could cause these problems. Conflicts with other devices is also a possibility. Finally, a low power PS might be at fault. You should try running with the latest motherboard bios and without any other cards installed. Make sure you've removed your old drivers and re-install from scratch the 9700 drivers.
You need to isolate the problem. Otherwise, it's unlikely any driver change will make any difference. Each 9700 card shipped by ATI right now has been tested heavily with multiple motherboards (yes, it's slow, but the initial cards are tested heavily) -- It's possible, but unlikely, that your card is bad. Very unlikely that all your friends' problems are due to bad cards. Both internal testing and reviewer testing had shown stable cards, with a good set of different motherboards.
Good luck.