I have the same graphics device and the "Unknown Driver" problem. This is not a problem with the driver installation but with the fact that Ubuntu is unable to recognize it properly.
If you can see a properly functioning GUI and not a black and white Command-line screen, then your Graphics Card is working fine.
This issue has been frequently discussed:
If the graphics performance appears to be poor it may be simply because Precise does'nt have wobbly windows and other special effects enabled by default (or at least not in low end systems). Download Compiz and enable these effects and animations. They should work fine with Intel GMA Integrated Graphics (they do on mine!).