Shadow Map Issue

[nallyamp]

When I play the game with Shadow Maps on I get horrible black boxes on all the objects in game

Image:
http://img231.imageshack.us/img231/6480/bioshockpic.jpg

Video:
http://www.youtube.com/watch?v=fA4dTl9dv7o

If I turn off shadow maps everything is fine. I have
Uninstalled/reinstalled Drivers even used driver clean software etc.
Updated direct x (just installed Mar 2009 dist).
Uninstalled game removing any traces of files folders registry settings etc I could find.

I have run the game in Windows 7 Beta on a separate partition (same PC) and I do not get the problem.

I only get the problem in Bioshock, I get no other gfx probs in any other games I play eg: Crysis, Farcry 2, Halflife, UT3, GTA4, etc..

Can anyone help please?

Spec:
Steam Version 1.1
Max Settings (1680x1050)
Windows XP SP3
Intel Q8200
4GB Ram
Geforce 8800GT (182.50)
Soundblaster X-FI Gamer

[headkase]

Are you forcing Anti-Aliasing (AA) in the nVidia control panel applet? If so try to disable that and post back with the results.

[nallyamp]

Thank you for the reply.
Current settings are set to application controlled, i tried it with forced AA off and still the same.