I've got a Radeon 7500 and frankly i'm upset it doesn't work on my computer either since the first one played fine. The problem is the hardware of the 7500 doesn't do some opengl 1.4 functions. While they could have programmed around this fact, because they're lazy they didn't. So the only solution would be if ATI puts out a new driver that fixes the problem, which I don't think will happen. Or if Obsidian puts out a patch that fixes the problem, which I also don't think will happen bc they put it on the list of unsupported cards. Or the last possibility is if there's an opengl 1.4->directx wrapper, the only one i could find was gldirect, but I couldn't get it to work with the game.
This is the ONLY game i've ever seen that supports radeons but not the 7500, which is a little ridiculous since the card is still pretty widely owned.