FF7 and Radeon - black backgrounds

[case]

I already asked this question about a year ago, but since then my hardware and OS have changed and maybe there's new knowledge about these issues, so I think it may be worth to ask again:

I'm playing FF7 on Win XP with a Radeon 8500 and Catalyst 3.8 drivers. I have the Riva patch installed and in software mode the game runs fine. But I want to play in D3D mode.
When I activate hardware acceleration there are two problems:

- There is some color distortion in the menus and on objects like the hand cursor or the exit arrows in scenes with a scrolling bitmap background. I wouldn't care about this, but the side effect is, I can't distinguish which menu items are active and which are greyed out. This is fatal in battles...

- The biggest problem is, all the 2D bitmap backgrounds are black. I can only see the 3D characters and objects, which renders the game completely unplayable.

Here are some screenshots which will explain it all better:

The startup screen. Note the oddly colored hand cursor and the grey menu items

A scene from a shop or something in Cosmo Canyon. The background is missing and the colors of the hand cursor and the exit arrows are wrong

The main menu. Again, all the menu items are grey.

It looks like it's connected with the color palette. Is there a way to fix this by changing some settings somewhere?

[Aaron]

Alright, so you downloaded the Riva patch.  Are you running the game in RIVA 128 or TNT mode?  (You should be using TNT mode.)  I dunno if it matters or what the side effects of running in the wrong mode are, but, that's all I can think of ATM.

[muybweno]

hmm thats weird...i have a radeon 9800pro and i've installed the rivaTNT patch and applied qhimms patch to it as well...i'm not getting any problems at all...since your running CAT 3.8 try upgrading to the current one which is 4.1 on ATI's website...my directX version is 9.0b too as well...as a matter of fact here are my specs for my rig..

athlon 2600+
1.0GB ram PC2100
ATI Radeon 9800pro @ CAT 4.1/DirectX9.0b
Epox 8KHA+ mobo
soundblaster live value
200GB WDC hard drive
WinXP Pro sp1

my problem and i'm still working on it is when you have AA and AF on with my radeon card...i get those crazy squares all over the screen, shown on the 2D bitmap, but if i turn off AA and AF they all go away.  it gets really annoying!!!  Sorry, i'm a freak for graphics and i just cant play FF7 without AA or AF on.  It just looks so nice when its on!!!

Allen

[case]

A possibly interesting fact: When I use one of Ficedula's tools to view the menu bitmaps from the LGP files, I get exactly the same wrong colors on my desktop. Yes, I already tried to change the color depth, that doesn't change anything. So the question is: how can the color palette still be wrong when the game's not even running?

I may download the newest drivers although I don't think the problem is driver related. I bought the Radeon long before I upgraded the rest of my hardware and OS and the same errors happened under Win 98 and earlier driver versions (and also earlier DirectX versions).

I once had problems with fog not being rendered in another old game and I had downloaded about ten driver updates, hoping they would add fog support for the game at some time, when I found out that the problem could be solved by setting a special combination of fog options with a Radeon tweaker. I had played with those options numerous times before, but never tried that one special combination.
I don't know why, but for some reason I believe there could be a simple solution for this problem too.

Any ideas on what driver options have influence on the way colors are rendered in games?