I'm not at all sure that KotOR-I required onboard T&L in the GPU, but this game does, and many onboard video chips, such as those from Intel and SiS, cannot meet that requirement. Only the 3100X and newer Intel chip included it, but getting usable drivers to make those work is usually nigh unto impossible!
DirectX 9.0c compatible computer.
Operating Systems:
Windows 98 SE, Millennium (ME), 2000, and XP.
CPU:
Pentium III or Athlon class 1 GHz or faster required.
Pentium 4 or Athlon XP class 1.6 GHz or faster recommended.
Memory:
256 MB RAM required.
512 MB RAM recommended.
Graphics Card:
32 MB OpenGL 1.4 compliant AGP or PCX 3D Graphics card with Hardware Transform and Lighting (T&L) Capability required.
ATI Radeon 9200 or NVIDIA GeForce4 Ti or better recommended.
Sound Card:
100DirectX 9.0c compatible audio device required.
CD-ROM:
Quad Speed CD-ROM drive required.
16 Speed CD-ROM or DVD-ROM drive recommended.
Input Device:
Keyboard and mouse required.
Well, looking at this next, it does seem that built-in T&L was required for KotOR-I:
What are the minimum and recommended system requirements for playing KotOR?
MINIMUM SYSTEM REQUIREMENTS:
* Windows ME/98 128 MB RAM
* Windows XP/2000 256 MB RAM
* 1.0 GHz Intel Pentium III or AMD Athlon processor
* 4 GB free hard disk space
* 32MB OpenGL 1.4 compatible video card with 32-bit color support and Hardware T&L
* DirectX 9.0 compatible sound card
* DirectX 9.0 (included)
* 4X CD-ROM drive
* Keyboard, Mouse
RECOMMENDED:
* 1.6 GHz or faster Intel or AMD processor
* 512 MB RAM
* NVIDIA GeForce4 Ti, or ATI Radeon 8500 or faster video card.
I'm at a loss, after all. It must be your OS. Gotta be.