In 2003 and 2004, she had a noted comic recurring role on Will & Grace as Lorraine Finster, Karen's (Megan Mullally) nemesis and daughter of Karen's lover, played by veteran British comic and Monty Python alumnus John Cleese. Driver has also worked on several animated features, including Disney's 1999 version of Tarzan and the dubbed English version of the 1999 Japanese megahit Princess Mononoke.
She began a low-profile return to music in 2000; in 2004 she signed recording contracts with EMI and Rounder Records and performed at SXSW. The contract led to the release of "Everything I've Got In My Pocket", which reached No. 34 in the UK, and a second single, "Invisible Girl" peaking at No.68. An album, Everything I've Got In My Pocket, also reached No. 44 in the UK album chart, backed by a group that includes members of the Wallflowers and Pete Yorn's band. Driver wrote ten of the eleven songs on the album and also covered "Hungry Heart" from Bruce Springsteen's The River.
In 2004, Driver played Carlotta Giudicelli in Joel Schumacher's film of The Phantom of the Opera. Due to the vocal requirements of the role, Driver was the sole cast member to have her voice dubbed. However, she did lend her own voice to "Learn To Be Lonely", a song written by Andrew Lloyd Webber specifically for the film version of his musical.