Second, try by using the old graphics engine. I'm pretty sure that option is available in v9.3.
I think you have a problem with the graphics capacity of your system. One option might be Win 7 but that might not be an option for other reasons. Also, are you in a 32 or 64 bit system? My experience is based on 64 bit.
I had this problem when i upgraded the driver of my ATI video card to the lastest version. I can only use the orignal (rather old) driver, otherwise i get this problem.
I would still advise to try to roll back the driver to the original one, probably provided on the installation CD of the card. This solved the same problem for me (also with an X1600 card) while maintainting hardware accelleration (which is much faster)