Incompatible Display Driver error installing plugable USB 2.0 display adapter for the first time

I receive this error when I am setting up the Plugable USB 2.0 display adapter for the first time “Incompatible Display driver. The installed version of Displaylink USB Graphics software does not support this graphics card, which uses a newer version of the windows display driver model.” I have verified that I have the latest driver for my Intel HD Graphics 5500 and the latest driver for the pluggable device as well.
I have a Windows 7 Enterprise machine. The error occurs after I plug in the device, and it completes the installation, screen flashes, green light temporarily comes on then goes off, screen display come up much larger than normal and then error and display goes back to normal resolution. Current display resolution is set to 1440x900. What am I missing?

Please see my direct reply.