I have installed Star Wars Knights of the Old Republic 2 on my computer and for some reason, it just wont work. When I play the game, it starts but there are a load of weird triangles on my screen while playing. I have installed the latest patch for the game, latest drivers for the card,latest Direct X and I've defragged.
The "latest" drivers are years beyond this card. Make sure you ahve drivers that support that cart. The latest ATI drivers no longer support that card.
It is not surprising that a 4 year old game doesnt work. Later drivers introduce bugs that noone cares about in older games, bugs that often go left alone. You may have to try some drives in the 6.x series to get it to work. Never mind the latest 9.x drivers.
Unfortunately there is very often an expirey date on solid software compatability. the 9600XT is well beyond that date. You best bet is to google for older drivers and try them out. If oblivion works the card wont be "broken" but it could easily be a driver issue.
On my legacy machines I'll often ahve to switch drivers around just to play an old game. For example, wow doesnt work well on my 9800pro without relatively new drivers. Games like UT 2003 and deus ex much prefer the older drivers that were out around the same time as the game and dont work well on teh new ones.
If your running Vista or XP, you could try drivers first. The other thing that might work is to try the compatibility effect on it. If I remember correctly, you can turn it to windows 2000 pro compatibility. Maybe that would work, I don't know. I played both of these KOTR games on XP with no problems. Just remember, if you try the compatibility effects, do it on the swkotr.exe. Hope that helps.