Hm. My gut reaction is that it's how X.2 talks to the hardware, but... did you copy over your old files and play directly, or do a new install of Civ, repatch and only copy over mods, etc.?
Here's something else: there is a CivIII preferences file in preferences/library/user and it might be just enough to muck up the game. That might be worth a shot (but I can't say definitively). Maybe you want to ask (PM) Brad Oliver on this one.