Bullet,
Here's the screenshot:


Just as an FYI, for Vista x64 users they will not be able to install the ATI Tray Tools software due to an unsigned driver. This is corrected in the latest beta version, which can be found here:
http://www.softpedia.com/progDownload/ATI-Tray-Tools-Download-9040.html
Again, there is a 1.3 release version and a 1.6 beta - If you're on Vista x64 you need the 1.6 beta.
EDIT:
Okay, got the tools installed and went to the tweaks as you specified. Unfortunately, geometry instancing was already checked, so I may have another issue...
EDIT #2 <--- Important!
Playing around with the tool, I disabled OPTIMIZE PIXEL SHADER CODE and now it's working like a charm.
EDIT #3
Okay this gets stranger and stranger. disabling the option above fixed the graphics problem, but man oh man did things run like crap. However, I turned it back on and... guess what... everything still works (?!?!).
You know I love ATI and all, but their reputation for horrid drivers is well deserved... yeesh.