Odd BG glitch

[Lone Dragon]

I was kind of late to getting the new Nvidia driver for my card, but I finally got around to DLing it.
I followed the tips that said to first uninstall all previous Nvidia drivers.
When I finally got into the game, I experienced this...

I'm not a real tech person, but I think I have a vague idea of what's happening here.
Normally the BG is darkened so that anything outside of your range is dulled to look more natural, I call it a 'fog' effect.
It seems that fog has cleared, and it has the unfortunate effect of making things look jagged and, well, unnatural.

I know a system restore to get things back the way they were, but this update is supposed to improve the quality.
Help would be much appreciated.

P4 2.5GHz
DirectX 9.0
255MB RAM
NVIDIA GeForce4 MX 420
64MB VRAM

Don't comment on the specs.

Edit: My Clipping Plane is usually maxed unless I drop it for something like dynamis, and even then the edge wasn't as obvious.
SOLVED:I got an update through windows that fixed the problem. :X

[Tifa]

Try going to your in-game Config, and bump up the Clipping Plane all the way to the max. If this is already done, well then consider me useless, I don't know how to fix your graphics card I just know my screen looks the same as that when I turn my clipping plane down.