I have the same issue. Except the '-disable_glsl_mode' hasn't worked for me. It says it's an unrecognised command line parameter.
EDIT 2: There seems to be the same command already in the troubleshooting section. I used that instead of the custom flag and it's fixed!

EDIT: I wasn't supposed to put in the dash in front of the command, now it accepts it, however, no change in graphics.

I'm using a Dell Studio 17 laptop with ATI Mobility Radeon HD5650 and cannot change my gfx driver as in the past this has caused major problems. Afaik, I can only use the driver that was shipped with the system.
I have Freespace 2 on this system along with the graphic mod, could that be causing the problem?
Help would be greatly appreciated.