I got my game to finally work! I have an AMD X2 4400, Asus A8N SLI-Deluxe, and 7800 GTX. I'm using latest AMD driver 220.127.116.11.
Realtek AC97 64-bit audio driver v5.10.00.5830
(WHQL). Nvidia Driver Version: 6.14.0010.7801. Before installing any of the drivers or the game, turn off your virus protection. That's what worked for me. Now I'm runing the game in 1280x1024 and Antialiasing at 4x with no problem.