Vertex Shader Not Supported...

[Shacheh]

I saw a couple of these posts on the forums which both pointed at older drivers needing an update.. I have Radeon 9700 Mobility 128mb, not the best but not the worst card =).. The funny thing for me is that I played Overture just fine with approx. 6 months old drivers.
I had to update the drivers recently to 7.12 catalyst (Omega) and now the game freezes at start popping a black screen for a moment and then giving an error box saying Vertex Shaders aren't supportedby my graphics card. I can't really go back to my older drivers as I need the new version for my work.
I have uninstalled the old drivers fully and I also tried to remove the new drivers -> reboot and reinstall them but the problem persists.
Any ideas on this one?

Much appreciated,
Miika =)