If the collisions are being detected, then it most likely means, as BW says - no problems with the POF itself because the CPU is correctly reading the locations of all the polys of the ship. The way it's chopped up only polys means it can't be to do with the texture or distance culling either, and by the sounds of it it's not an IBX issue.
That leaves very few possible causes. :\
What SCP build are you using there? I'd suggest you try using a different one - like maybe this one,
and see if the same thing happens.
If there's still no change, the only other possability I can think of is that it's something wrong with your graphics card (which is after all only an integrated card) or drivers.
Rolling back to older drivers shouldn't cause any significant problems for your system, and if it has no difference you can always just upgrade to the latest again. The older ATI drivers for the Xpress 1100 can be found here: http://ati.amd.com/support/drivers/xp/integratedprevious-xp.html