Thanks for the replies, tried a few things.
@Abiel Corel NA
1. Deleted "C:\Users\<username>\AppData\Local\Corel" folder. Still hangs at same point.
2. Did the shift/double-click/shortcut trick, OK'ed "default state" prompt. Still hangs at same point.
3. Uninstalled X3, reboot, installed X3 (13.0.0.264). Still hangs at same point.
Tested one more thing. In bullet 3 i did a test install of X4 trial after X3 uninstall (before X3 install).
Looks like X4 do not have the same problem. Just an observation for now.
@Madaz
Interesting. Looks like your setup is very similar to mine. Win7 64bit and AMD 6950.
@eL_PuSHeR
Thanks for suggestions. They were officially available 31oct, I did download them from an AMD URL. Just to double-check I downloaded the 64bit driver now and did a binary compare against the one I downloaded. Was identical. Also, I didn't get the 'unsigned' prompt, so the drivers I used was 'WHQL signed'.
About the install technique. Very valid question. Independent of upgrade/downgrade of AMD drivers I always do the following (even minor upgrades): Uninstall CAP & AMD driver through official uninstall (Control Panel). Reboot into safe mode (F8). "Cleaner" on AMD stuff. Reboot into Windows. Install newer/older AMD driver. So it shouldn't be that, unfortunately.
One difference between us is that you look to be on 32bit Win7. Might be a problem only showing itself when 64bit. Or it could be something else. Problemsolving is so fun
Generally
Not sure what I will do at this point. Might have to go for X4, if registered version is ok too. See what gives the path of least resistance (& hassle)

I guess Corel wouldn't mind me going X4, if it solved the problem. But if there really is a general problem with Win7 64bit AMD 11.10 + X3. There will, in time, probably be more replies to this thread.