HUGE ISSUE WITH PORTAL!!

Ok, I just installed Portal. Began the game and when I started a new game, everything looks like THIS! =

http://img112.imageshack.us/img112/8...a060004wk9.jpg
http://img114.imageshack.us/img114/3...a060005lu0.jpg

Acer Laptop Specs:
ATI X1100
1GB RAM
120GB HD
1.6Ghz Cpu (AMD Turion 64x2)
20-60FPS(In-game)

I can run CSS/HL2/DODS and any other Source game perfectly.
And in console I get repeated env_cubemap errors such as:
env_cubemap used on world geometry without rebuilding map.
I don't know if that is what the problem is or what. I've reinstalled/redownloaded Portal three times already! I've even removed the file clientregistry.blob in my Steam folder and restarted Steam to reinstall Portal. If anyone has any suggestions to fix this fading or whatever it is, which looks like I'm looking into a skybox that dosen't have the sky texture in place, please post any help!! I really want to play Portal!! Also I've tried rebuilding the env_cubemaps in console, which had no effect, bah.

Are you drivers up to date?

I don't see what's wrong... I thought thats what it was supposed to look like...

ha

No they aren't, recently I had to do a video driver rollback from these random fps drops that I used to get in-game. I guess I can update them and see how it is. You think that's whats doing that?

Probably.  Or else you have a corrupt file.  Update DirectX too.

OK....well, now Portal just crashes on load, after I updated my ATI Drivers. And now I will try DX Update...

Ok great news, I found some help on the steam forums! Woot! Check it out: http://forums.steampowered.com/forums/showthread.php?t=609907
I beat Portal twice, with the issue, and without.