steam error code

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hello just finished d/l gta4 from steam. installed game and went to play now everytime i try to start the game i keep getting a fatal error telling me i need vista service pack 1 as very least to run the game. has anyone else came across this or know how to fix it???
 
yeah win7 i managed to get game going by checking the run compatability mode however the game wont let me play in any resolution bar 800x600 anyone came across this as well???
 
that doesnt work i get a red message saying im close to exceeding recommended specs or something however it tells me im only using 202/3046mb so i dont understand that and bar what you suggested above i cant find anything else on google as what to do next
 
i have that added as killswitch suggested but still wont let me change res and still has the same error in graphics settings
 
thnx killswitch that last one worked a treat, mind u the game runs like a bag o ****e right enough at low settings so dare not try to up them at all
 
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