I think since I installed on Tuesday all the races were always Federalists, at least in the race select screen anyways. Don't know if it picks something more appropriate for the race when you have them as opponents, this weekend is the first time I'll have to play.
First thing I would try is heading over to ATI and grabbing the latest video drivers. Your drivers show with a date of 10/4/05, I went to update mine last night in preparation and I believe the latest driver date was sometime in January of 06. May not be the right answer but getting the latest vid drivers always the best to try first. Edit: Doh, beaten by the right answer. Still you should update anyways.
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