Just some personal background: in my other computer I have no problem with that fancy mode (it's 160 cols x 60 rows, but it has a 4:3 CRT monitor). It's equipped with a TNT2 (yes, I swear), and that mode was promptly displayed on first boot. Problem is, it does this by loading the nouveau driver, and this guy is still a bit faulty (in my case, it hangs the whole system when trying to move windows). So, to have an usable system, I had to downgrade to the old and stable nv driver, and also disabling mode-setting ('cause the kernel would always load nouveau when enabled). Note that I'm not using nVidia proprietary drivers, but like you, I was switched back to 80x25 in console mode.
This is because the nv driver doesn't use kernel mode-setting. Now, I don't know about the proprietary drivers, but I'm guessing they might have changed your configuration in order to be usable, and possibly that's why you're seeing that "big" mode. Possibly they disabled mode-setting when installed. That's why you see the "small" text mode when booting from the Live CD.
You could try booting up with a different VESA mode, but that depends a lot on your hardware. For that, please check http://en.wikipedia.org/wiki/VESA_BIOS_Extensions#Linux_video_mode_numbers. For example, if you'd like to try booting your text mode on 1024x640, you'll find that the mode ID is 877.
So, when booting, hold the SHIFT key (in case you don't have a GRUB timeout) to bring up GRUB's menu. Select the mode which you wish to boot and press 'e' (to edit the commands). At the end of the "kernel" command, add
vga=877. The number is the mode ID, if you want to try other modes, replace it with the desired number.
Also, at that same Wikipedia page, you could also try the helpful "Universal format" right below the modes table. That hwinfo command is quite useful.