I looked on the Gigabyte webpage and you are right. On-board graphics are automatically disabled.
So I tried again.
In Device Manager I uninstalled the on-board graphics, shut down, and installed the ATI card in PCI 1. I connected my monitor to the new card and restarted. Monitor says no signal. I hooked the monitor back to the old output and i have display but with lower resolution than I had before (i was able to change back to proper resolution) . I went back to Device Manager and the on-board graphics was still there and the new ATI card was recognized too. In Properties it says: Device cannot start (Code 10).