If the HW Shading feature is not supported you might definitely have a driver issue, because it might not recognize all the features of your card.
Max Preview texture size should go to 4096. (although it this will take a lot of memory)

I have both an ATI X800XL and NVidia 7600Gt - older videocards - but these have all the features enabled.

Just to check - You do have 32bpp color on? If you have it set to 16bpp it will disable the HW Shading feature.