I´ve a Radeon 9550 here.
Got the same problem with initializing 3D-engine.
Try the following:
- de-install graphics driver completly. Use tool "Driver cleaner" after normal deinstall-routine
- get the latest DirectX from Microsoft - install it
- install latest graphics driver from ATI
http://www.ati.com or
- use the ATI Omega drivers
http://www.omegadrivers.net/
Important is to first install DirectX!
Hope this helps...