To check on driver install status, I would suggest checking the video card properties in Computer Management -> Device Manager, and/or checking for errors in your Event Log under Control Panel -> Administrative Tools.
Odds are fair that it is installing just fine, however, if it's not throwing an error message for you. There are apparently some known general issues with the 19x series nVidia drivers, causing various random problems with a variety of games, and even some hardware damage in a few very rare cases -- so I hear. It's largely unsubstantiated, of course, so I'd suggest just googling that to see if you want to be using them. I do happen to be using the 19x series with no problems at all with my 8800GTS, but it's a bit of a different situation for everyone. You may want to try using a 18x version from nVidia, if that is your graphics card vendor, to make sure you are avoiding all possible issues.
Beyond that, I'd ensure that you have hardware acceleration turned on fully for your card under its properties, and that there aren't any unusual other programs trying to subvert the DirectX rendering from other applications. Steam and XFire and FRAPs and such hook directly into the DirectX layer and are perfectly compatible with AI War as well as most other games, but a few other programs (Mumble has been mentioned in the past) may not interact so well with any given other program, including AI War.
You might also try running dxdiag and making sure everything looks good there, that everything is turned on and reasonably up to date (and not on a debug build or something).
Hope that helps!
