Is this the error message you are seeing:
http://www.displaylink.com/support/ticket.php?id=293
Message "Incompatible display driver" on install or device connection
Symptom:
After installing DisplayLink software or connecting a DisplayLink device on Windows 7, an error message is seen:
Problem:
This message will appear if the primary graphics card drivers installed are not WDDM compatible.
The DisplayLink solution will not function if the primary graphics card drivers are XPDM drivers (XP Drivers).
Solution:
Download and install the latest Windows 7 drivers for your primary graphics card.
Wim