64Bit applications on a 32Bit OS wont run, period. The OS which predates 64Bit being widely used does not take account for the address space changes in 64Bit and a 64Bit program uses registers which the CPU cannot understand, my guess is an invalid opcode error would occur. Just guessing though.
It's unlikely he downloaded the wrong drivers since ATi uses a universal Catalyst Driver, might be an old version or a beta version of the driver he got, really hard to tell unless he gives more info. I wouldn't get so hasty and reformat just yet.
Go into the Ati Control Center and disable things like Anistrophic Filtering, and Anti Aliasing or check the "Let the program decide for me" since that seems like a fucked up Anti Aliasing and dissolving issue to me.
Try uninstalling all the video card drivers and reinstalling them using the latest Catalyst Drivers from ati.com and try making sure DirectX is the latest (9.0c) by going to run -> dxdiag. It wouldn't hurt to take some of the Diagnostics test there either.
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