There's been a couple of people that had the same problem, but they seem to give up on the thread & we never get to the bottom of it.
So far we've narrowed it down to the Radeon 9xxx series, and it's possibly a problem with the way the card handles GL.
Fyerrblad has a Radeon 9 series, and has working shaders.
Have you tried turning on shaders & switching off all the additional shader options?
(the 1st post was kinda hard to see exactly what option combinations you've tried)