I tried running the Gears demo on a Windows 98 machine with an ATI Rage Pro and probably old drivers and the demo came up OK, but the VM crashed on the first resize regardless of whether the ATI_WORKAROUND property was set to true or false. Visual C++ wasn't available to try to debug the issue further.
I'll try to run some tests with a more recent OS and drivers.
For reference, DxDiag reports this about the display on this machine:
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System Information
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Time of this report: 7/27/2004, 09:09:13
Machine name: KDULING-PC
Operating System: Windows XP Professional (5.1, Build 2600) Service Pack 1 (2600.xpsp2.030422-1633)
Language: English (Regional Setting: English)
System Manufacturer: Dell Computer Corporation
System Model: OptiPlex GX240
BIOS: Default System BIOS
Processor: Intel(R) Pentium(R) 4 CPU 2.20GHz
Memory: 512MB RAM
Page File: 281MB used, 968MB available
Windows Dir: C:\WINDOWS
DirectX Version: DirectX 9.0b (4.09.0000.0902)
DX Setup Parameters: Not found
DxDiag Version: 5.03.0001.0902 32bit Unicode
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Display Devices
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Card name: 16MB ATI Rage 128 Ultra
Manufacturer: ATI Technologies Inc.
Chip type: RAGE128 PRO II, (AGP 4X/PCI)
DAC type: Internal DAC (350Mhz)
Device Key: Enum\PCI\VEN_1002&DEV_5446&SUBSYS_04081002&REV_00
Display Memory: 16.0 MB
Current Mode: 1600 x 1200 (32 bit) (85Hz)
Monitor: Plug and Play Monitor
Monitor Max Res: 1600,1200
Driver Name: ati2dvaa.dll
Driver Version: 6.13.0010.5004 (English)
DDI Version: 8
Driver Attributes: Final Retail
Driver Date/Size: 1/11/2002 00:23:06, 318080 bytes
WHQL Logo'd: n/a
WHQL Date Stamp: n/a
VDD: n/a
Mini VDD: ati2mtaa.sys
Mini VDD Date: 1/11/2002 00:22:10, 295168 bytes
Device Identifier: {D7B71EE2-1706-11CF-3E60-0224A2C2CB35}
Vendor ID: 0x1002
Device ID: 0x5446
SubSys ID: 0x04081002
Revision ID: 0x0000
Revision ID: 0x0000
Video Accel: ModeMPEG2_C ModeMPEG2_D
Deinterlace Caps: n/a
Registry: OK
DDraw Status: Enabled
D3D Status: Enabled
AGP Status: Enabled