I've had this problem, too, and haven't been able to play since my game was autopatched to version 1.2.3.  Like others here, I have an ATi 4870.

Looking forward to the 1.2.4 release and its included fix for this issue.  Heck, if all this patch did was fix this problem and nothing else, I'd still be celebrating.

Thanks for looking into this and discovering the cause!