4800 as in geforce 4800ti ?

Sorry that is confusing, I meant ATI 4800 series, it's actually a 4850.

I kept on with the game despite the graphic glitches and after the first level I've only seen a few of the broken textures so it's not so bad as to be unplayable. Still without anyone knocking themselves out if you know anything that might help be sure to let me know.

I remember when Neverwinter Nights 1 came out, one of the graphics options was Shiny Water I believe and it caused weird texture reflection issues, not just with water.

I thought later drivers resolved this but perhaps it still occurs with select game titles ?!?

No way of knowing if this title has that option or not.

I think your right that it might have something to do with shiny/transparent objects/overlays.

Whenever you pick up and item or get hit by an enemy the screen goes black for almost a second, this makes playing hard if you get into a situation where your getting gang banged by enemies because you're left fighting in the dark. It is kind of interesting that way though. Would seem like its probably doing some sort of screen flashing for those events with an overlay thats not being rendered correctly.

Also the textures which are screwed up seem to be shiny ones usually except some floor textures and some wooden fence textures. Which is what made me to think it was tiling related but I'm not sure anymore.

I tried messing around with the shadows and shading but no matter how I set that it didn't make a difference. Unfortunately there are no options for reflective or transparent surfaces.

Um...You Are Empty is that notoriously bugged Russian game that was released in an unfinished state, isn't it? Any glitches you experience are the result of that. It's "normal" for that game.