T3D Display bug with ATI radeon ? [resolved] - NOT A BUG

I'm running into a weird issue on my test PC.

my test machine is an Intel (x4 cpu) with ATI Radeon 5670 card. It has latest drivers and SDK installed.

Whenever I load up the levels, the graphics appear all skewed up ... and models are not even visible.

skewed graphics examples;
jyaskus.com/downloads/IMG_26012011_210658.png
jyaskus.com/downloads/IMG_26012011_211139.png
jyaskus.com/downloads/IMG_26012011_211322.png

However, the game still seems to work ... I can move around and hear sounds.

My main PC is AMD x6 CPU w/ Geforce GT250 card ... and the level looks fine;

Working examples
jyaskus.com/downloads/crashsite1.png
jyaskus.com/downloads/zone2_screenshot1.png

... Any ideas how to troubleshoot this further ? Is there a known issue ??