Well updating my AMD drivers to Catalyst v11.6 definitely fixed the black terrain issue for me, I haven't had a problem since. Presumably there was some optimisation tweak in there that for whatever reason solved the problem - it was only occurring for me in C2C v14. Yours is an older graphics card though (I have the 5850) so I can't guarantee that it will work for you.
Good hint, helped me to solve the issue:
I thought I already installed the newest drivers few weeks ago, however, redownloaded and could install (the newest version is from 15th june).
I could run the game once! After a computer restart, C2C failed to load: before the title sceen loads I got: "Failed to init Shader" or something like this. Standard BTS worked.
I reinstalled the ATI driver, custom install, for no apparent reason it installed again and C2C worked another time.
However, I just remember the missing avatars of the civ leaders when having the black terrain issue. IIRC it was mentioned a new shader model for the leader heads - so maybe this is related?
Thanks a lot for the help and for this great mod!
EDIT:
Aarg, it still didn't work for long!
When I tried to start again (not PC, only C2C), I got the "Failed to load shader libraries" issue, reinstalling the driver didn't solve it nor restarting etc, searching ... , I had to toggle off "Win XP SP3 combatibility mode" (I just remembered that it was this that solved the problem with v13) but then I had the black terrain issue again ... . Different other constellations / try-outs didn't seem to work to fix it. Finally I removed the Custom Civilizations folder:
I had to start a new game (loading ended wit CTD), but no more black terrain. Besides, seemed to be a little bit faster than without Win XP combatibility. However, not sure, whether it'll work after re-start etc., may give it a try the weekend.