Well I reprogrammed those shaders.. I don't really think I'm using much that requires SM3.0... but if you really have problems with the MVP shaders, then it might be that we really blow the instruction limit for lower shader models since I think we use even more instructions than the MVP... It's kinda hard to avoid that since we have to handle multiple light sources.
But anyway.. I'll promise you that we will try everything we can to get the fixed function pipeline issue fixed as well so even people without shaders can play the game without bad graphical issues.
We'll test this before release. If we really find out that we run into problems on systems that only support SM2.0 I might even try to programm a few lower-tech shaders which run on SM2.0 systems and we'll offer those as a separate download. I can't promise anything here, since I don't know if this is 100% possible, might be the engine puts on some limits here too, but if it is possible I'll try to provide a low-tech shader set.
This is really important because without the shaders right now you cannot really enjoy the game at all because you clearly see the edges of the skybox, and that is VERY distracting. but as I said, we'll do our best to get that fixed. We're kinda depending on the SCP people for this though.
Edit: You might also try deactivating normal mapping environment mapping etc in the launcher. The less you have activated here the smaller the shaders you're using become. if it is really just the instruction limit this might help you. If not then it's something entirely different, but as I said.. we'll work on it.