I'm having the same problems.
I have vertical sync enabled, here's my graphics info
Driver Packaging Version 8.881-110728a-124441C-ATI
Catalyst™ Version 11.8
Provider AMD Technologies Inc.
2D Driver Version 6.14.10.7213
2D Driver File Path System/CurrentControlSet/Control/Video/{6ACDBBD5-D950-4F2B-95F0-2816F7FAFC5D}/0000
Direct3D Version 6.14.10.0855
OpenGL Version 6.14.10.11005
Catalyst™ Control Center Version 2011.0728.1723.29300
AIW/VIVO WDM Driver Version 6.14.10.6238
AIW/VIVO WDM SP Driver Version 6.14.10.6238
Operating System: Windows XP Professional (5.1, Build 2600) Service Pack 3 (2600.xpsp_sp3_gdr.101209-1647)
Language: English (Regional Setting: English)
System Manufacturer: System manufacturer
System Model: System Product Name
BIOS: BIOS Date: 08/10/07 10:04:22 Ver: 08.00.12
Processor: AMD Athlon(tm) 64 X2 Dual Core Processor 4800+, MMX, 3DNow (2 CPUs), ~2.5GHz
Memory: 2048MB RAM
Page File: 984MB used, 2954MB available
Windows Dir: C:\WINDOWS
DirectX Version: DirectX 9.0c (4.09.0000.0904)
DX Setup Parameters: Not found
DxDiag Version: 5.03.2600.5512 32bit Unicode

Thanks for the help