I'm having the same issue on Vista 64, Steam version of the game. I'm using a similar card, Radeon X1950 XTX. My drivers are over a year old and the corruption is identical. It can also be seen during cut-scenes on certain sprites and even on the main menu. It's always the same sprites that are glitched out.
It really sucks having bought what looked to be a beautiful game, to having it a garbled up after ponying up for it.
I remember the demo didn't have this issue. And I'm pretty sure I've had this card since '06. Was there a demo out before then? I should really prefer not to roll back my drivers a couple years in order to play.
Maybe I'll download the demo again and see if there's corruption in it.
EDIT : The corruption is present in the demo. Guess I should have replayed it before taking the
plunge (punny).