I used to have a 4670 and It ran DAO fine, no graphical errors.
I upgraded to a 5770 recently and I've been having problems. It seems to have a very bad draw distance and will run games quite poorly. It seems like the GPU is not properly loading the "close textures".
(Textures are on on optimal settings, and quality is set to very high)
i had a somewhat similar experience with my old 4870 the only difference is it weren't loading the "far/distant textures" properly in crysis (and i got bashed by the resident ati fanboys for telling so).
anyway, you could:
1. set ccc to defaults
2. switch between 8x/16x anisotropic filtering and see if it changes how the textures are rendered.
3. make sure that no options are set to "optimal" or "performance".
4. try a different driver.