As far as I can tell the effect only works on directx 9 enabled hardware which means a Radeon 9500 or higher and a geforce fx 5600 or higher (to a lesser degree). This means that the effect utilizes pixel and vertex shaders 2.0 which older cards cannot do. If it's a directx 8 feature then the code is either buggy or doesn't work right on nvidia hardware. You can turn the effect off in the custom graphical detail options under heat effects.
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