If you know how to switch to a different driver for your graphics card without wrecking your whole system (use ati`s uninstall all tool in your prg. files folder)
try a different version.
This link has several catalyst version listed, first give the 5.10 version a try, after that try 6.5 beta
edit - heres the link: ;-)
http://downloads.guru3d.com/download.php?id=18
IŽd also make a directx reinstall.
Even with your not so up to date VGA you should see more than one frame, sound like a driver bug / incompatibility
Do you have SH3 too on the machine installed? Does it run well?
Sorry, should have read your posting better, indeed you have SH3 installed...