It's a lot easier to show than to describe what the problem is here, so here's a screen shot:

Only the 3D portion of the game window is glitching out. The distortion is continuous, and "vibrates", and seems to be anchored to the terrain. It gets worse as more of the map is uncovered. It happens every time I try to run a game, whether the campaign, or a custom game, or whatever. It makes the game unplayable.
I updated my Radeon driver and DirectX, and the problem persists. The card is an on-board Mobility Radeon HD 3200, which according to System Requirements Lab is more than adequate to run this game.
This is debug.err from my most recent attempt: http://pastebin.ca/2036154 From reading it, I'm guessing the trouble starts at the line " Debug Message: WARNING: (CXFileData) FindRegisteredMaterialIDByName could not find registered material with name 'lambert2SG' ". The file says that the game can't find a lot of resources that should be there. Maybe patch 1.1 didn't take correctly? Maybe I should uninstall, reinstall, and repatch?
I also downloaded and installed the Walmart extra (The Relic of Agrynn) after patching to 1.1, so maybe that caused a conflict?
I also have an unrelated bug to report, which I discovered while parsing debug.err:
"DebugMessage: No string tables in C:\Users\Richard Rivers\Documents\My Games\Elemental\Mods/Data/*.str"
Those forward slashes at the end ought to be backslashes, yes?
Update: I just spent some time in the Builder's Forge (this problem also occurs in there) and it happens whenever I try to plop an object, and not on a bare canvas. It's worse depending on how many polygons the object is made of, so this is definitely a rendering problem.