Compressed texture Error for Video card settings.

I have a Radeon HD4850 with the most updated driver. yet everytime i start up Demigod, it freaks out with some random video stuff then gives me an error. "Compressed textures support is missing or disabled. Please Ensure system has current video drivers." I just downloaded the new drivers today (4/19) and Demigod will not start. Any suggestions?? Thanks.

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take a look at this thread. it's not exactly what you're looking for, but i'm pretty confident you'll find the ability to enable the required functionality in that program.