You need to extract it first, yes. If you want, you can make a new folder just for the purpose of extracting the drivers to it so you'll be able to find it more easily. Once you've extracted it, you need to go to the control panel, in the device manager and find the device in question (In this case the display adapter.) If it says it's a "Generic driver adapter" or something to that effect, then your drivers are not installed, if it gives you " Intel extreme adapter yadda yadda" then your problem lies elsewhere.
To install them, just right click the display adapter>properties>driver tab>install and then point Windows to the location of the extracted drivers. If the install option isn't in the driver tab, you will have to uninstall the old ones first. This is as easy as clicking uninstall, yes, and rebooting. Then you should be able to install no problems. You'll have to reboot after a successful install too, but Windows will tell you that.
I really hope that's the problem, because other than adjusting the monitor settings I'm pretty much out of ideas.