Hang on a second, I'm obviously missing something here about the whole ATI card issue - I don't really keep up with this, I usually just select Software Rendering and be done with it as to me it's only a minor difference between Software/Hardware Rendering. Anyway...
Without AA/AF, simply selecting the NVidia TNT radio button gives me perfect results, hardware rendering with no tiling or anything, perfect field screens. It's only when I use AA that I start getting gridlines & messed up text, but wasn't this the issue with GeForce cards and their various drivers? Bearing in mind I'm using the QFixApp utility to run the game since I'm on Windows 2000, and not using it crashes even in Software Rendering (usually when I enter a battle).
Either way - I did try your method but switching the driver value still doesn't work, it reverts back to Software rendering, as noted by the pixellated textures.