Were it not for the unusual nasal focus of the distortion in your screenshot, I'd say your card is overheating. Does your 9200 have a fan on it, or just a heatsink? Does your case allow easy airflow over the card? Try popping off the side of the case and pointing a desk fan at your card. If that resolves the issue, your card's overheating.
Still, I think that's a long shot. More likely is your drivers have gotten screwed up and need to be cleanly removed and reinstalled.
1) Download
Driver Cleaner and install it. Don't run it yet.
2) Go to the Add/Remove Programs item in the Control Panel. Find the ATI Uninstall Utility and run it. This will remove every ATI piece of software on your system (mostly). Make sure that when it's done there is nothing left in the menu at all related to ATI. If this gives you errors (and ATI's drivers do this a lot), go to the device manager instead, find your graphics drivers (under Display Adapaters), right click, and choose uninstall.
3) Reboot into Safe Mode by rebooting your machine and pressing F5 or F8 BEFORE windows starts to load. You'll get a menu of boot choices. Choose plain ordinary "Safe Mode".
4) In Safe Mode, run Driver Cleaner. Choose every ATI related cleaning method available and run them all. You can run the CAB cleaners too if you feel like it.
5) Reboot into normal Windows and install the latest ATI graphics drivers (which I'm guessing you already have downloaded). Reboot when prompted.
If you're lucky and your computer is at least reasonably fast, this whole process should take less than 15 minutes. Since ATI's driver upgrade process from one release to the next is rather iffy, you should go through this process every time you upgrade your drivers. I used their cards for 3 years and finally got sick of the constant difficulties with their drivers. I use a Geforce 7600GT now (and MAN is it fast).
Hope this helps. By the way, your card IS compatible with DirectX 9.0c, HOWEVER, it cannot use the new featuers of 9.0c. When 9.0c is installed it will only use the 9.0a features, but will work just fine with your card. The DirectX drivers are very backwards compatible.