DELL XPS M1330 brightness adjustment broken

I am 100% sure this is a graphics driver issue.

Backstory:

I have a family friend who was using Windows XP on this laptop until recently, it worked well for her. However, she was forced to upgrade to Windows 7 because of XP's EOL and software incompatibility. So I upgraded her laptop to Windows 7 64-bit. I know Dell does not have Windows 7 64-bit specific drivers on the website, but Windows Updates seemed to take care of driver installs just fine. Everything works great except one thing. The brightness adjuster is wonky. 

Problem:

Let me explain. When I lower the brightness down one increment (FN+DOWN), the screen does nothing. I go to the Control Panel > Power Options where there is a slider so I can visually confirm the slider is moving when I press the hotkeys. But, when I go down further to the medium brightness, the screen starts flickering. What is worse is that when I go down to the lowest brightness, the backlight turns off and I have to shine a flashlight at the screen to continue working. The brightness refuses to come back up.

Steps I have done to troubleshoot:

1. Update graphics drivers. Windows said this was already the latest version. Dell does not have any drivers for Windows 7 64-bit on their site.

2. Reinstalled graphics drivers by uninstalling it completely, restarting, and then letting Windows install again. This did not help.

**While the drivers were uninstalled, brightness adjuster worked correctly.**

3. Booted into safe mode. Brightness adjuster works correctly!

4. Booted normally, dimmed brightness down to minimum and plugged in an external monitor. External monitor worked as expected and laptop monitor brightness adjuster was unresponsive.

5. Installed Windows Vista 64-bit drivers. Did not help.

6. Installed the drivers offered on the Intel website. Did not help.