Just installed Quake III Arena and it appears to automatically enable S3TC.

Check out the photo:

Showing up on the extension list != extension enabled and used

borgie83 wrote:

Ok reinstalled DX7a then installed the Via 4in1 4.35 drivers and BAM! DXDIAG all tests passed including DirectSound and DirectMusic. Ran 3DMark 2000 and that runs beautifully as well!

So it obviously has to do with the VIA chipset as the 4in1 drivers fixed the issues I was having.

Will have to install Quake II and run some further testing though considering you were having trouble with OpenGL.

Never try to use a VIA board with an AGP card without the 4in1 drivers. I had to learn that lesson, too.