I just bought a new dell pc it's got an ATI X1300 Pro graphics card. In mtm2 (set to hardware mode and in full screen) I see lines across the back of a truck that I've made. However the quality is still better than software mode (although the looks normal). I don't think it can be a problem with the truck because it worked fine on my old pc when set to hardware.
yeah, every time i update my nvidia drivers, it fixes 5 problems and causes one more, right now im lucky, i dont c any problems in my current version, so im never upgrading heh. But definitly try upgrading your drivers. or downgrading if that helps you.