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Have you tried different video drivers? If not, play around with them and see if changing the driver or setting within in the driver changes anything. I'd recommend looking for Pete's GPU plugins. (I don't have a link on hand, but I think Zophar's has a link to his site somewhere.)

Does it work in a PS1? That'd be a way to determine it, also.

The help file with 1.6.0 doesn't say anything about a common issue with this, so just try fiddling around a bit.