This is how i got it to work:

I had to turn all the options off (reflection, fluid blood, skip frames and soft shadows) hit enter, go back into options then enable shaders and it should work. You can then go in and enable the other options except soft shadows, for me as soon as you enable that it turns off.

Also make sure you have any older versions uninstalled, this only worked after i uninstalled an earlier version.

edit:

Oh i have an ATI 9600+ XT Overdrive on Windows XP SP2