I’m not able to replicate or had found a quick solution to this problem. It does not happen that often enough on my rig to warrant a full fledge troubleshooting. When it does happen, usually exiting and re entering the game usually resolve the problem, well for me at least. But I admit it is freaking annoying when it does happen. Depends I guess from 1 pc to the other. Since the issue is not apparent on all the PC’s I have encountered, maybe, this bug is more subject to different hardware settings, motherboards, chipset compatibility, brand name of video cards and such… There are many aspects to think about. PCI latency vs voltage stability going to your agp slot maybe something to consider also. Not sure, just pushing some ideas around. I admit this issue was never apparent or was never mentioned with version 1.02. I have both version install on my rig, I never seen this strange effect with 1.02.
Not sure again, just brainstorming some ideas, maybe some Beta testers with Nvidia cards can elaborate on their findings, if any, not sure if an investigation was done on there part on this bug. Maybe Ed might try to shade some light. Then again ED is hard at work with BS at this time. So I do not expect ED to respond much thus far on this issue.
Does it happen in every instance on your side? Have you tried with and without AA & AF. Tried all the combination possible? Have you tried with and without Agp fast write? Considered trying lowering your agp settings to 8X to 4X and lower just to see if might shade some light? Also in your advance Nvidia settings make sure you set you Negative LOD bias to clamp instead to allow, performance to Quality settings. I have chosen; High quality, this helped some of the issues I had with lomac.
Anyhow good luck, ...
Cheers