Well, usually this problem occurs when your graphics card is lower than 128mb, but yours looks ok..
Might be because your card is very on-the-edge, it's basically the last version shaders support, so it might just not be good enough for the job. That's just my guess though, maybe someone else will give a better reason for this.
One question though - before this, did you always just play in non-shaders? Or did they work before?