Windows Server 2003 shipped with many third-party display devices supported. This support was different based on the product SKU-for example, Standard edition vs. Enterprise edition. On Standard edition, third-party drivers were present and fully supported to enable full support if the system was going to be used as a client or in a workstation environment or role. On Enterprise edition, the development team decided to have no third-party display driver support, Direct3D was disabled by default via registry settings, and only the Microsoft-owned VGA drivers for base display support were shipped.
Windows Server 2008 pre-Beta3 had the same display device support that was in the Windows Vista client release. The code base used for the Windows Server 2008 release was carried forward from Windows Vista and, along with this, all the client-level device support. Windows Server 2008 does not have the ability to differentiate device support on a per-SKU or edition basis as did Windows Sever 2003. So the only differentiating mechanism available is the product type decoration in the driver INFs, which are documented on MSDN at http://msdn2.microsoft.com/en-us/library/ms794359.aspx.
The Windows graphics team reviewed the current limitations within per-SKU differentiation, and they discussed many options with our hardware and OEM partners. The decision was to mark all inbox third-party display drivers as Workstation only, thereby not enabling them on any Windows Server 2008 SKU. Starting with the Beta3 release of Windows Server 2008, the default user experience upon installing the operating system is that the user will boot the machine with the Microsoft-supplied VGA driver. Some of the specifics of this include the following:
• The VGA driver always assumes that a monitor is connected even if it cannot detect one.
• The default display resolution for the VGA driver is 800 x 600. There is logic to choosing a higher resolution, but that is bypassed for the VGA driver because we cannot determine the frequency it will use for resolutions set through the VESA BIOS.
• The frequency of modes for the VGA driver is chosen by the video BIOS, but for 800 x 600 we have yet to encounter a BIOS that defaults to anything other than 60 Hz. The reason we use 800 x 600 as the default mode is that we found a few BIOSes that choose unusual timings for higher resolutions.
• Regarding color depth, the default color depth is 32 bits per pixel at 800 x 600. If this mode is not supported, we try the highest color depth available for 800 x 600, and in the very rare cases where none is available, we take the best 640 x 480 color depth mode available.
• Regarding the maximum display resolutions available when running the VGA driver, this is based on what the display device reports as available VESA modes listed in their video BIOS. Most devices since 2004 should properly support 640 x 480, 800 x 600, 1024 x 768, and 1200 x 1024 at good color depths, either 16 or 32 bpp.
• With the VGA driver installed, only system hibernation is supported. You cannot enter any sleep states outside of S4 (hibernation) and S5 power off.
With the removal of third-party display drivers in the Windows Server 2008 release, the core graphics infrastructure is still available to re-enable full display functionality. You need to go through Windows Update or your system provider to obtain display drivers for your hardware and install them to regain functionality.
Source of Information : Introducing Windows Server 2008