Unable to create new color palette

Is the message I'm getting after a new install of AutoCAD 2004 (single user) on a Win XP Pro machine with a Radeon 7500.
I have found several instances of this same problem on various AutoCAD 2004 boards but no solutions offered. There seems to no reference to this error on their support site.
*AutoCAD error "Unable to create new color palette" followed by a Fatal Error Unhandled Access Violation 0x0000 exception at 3600c1e8h... After installing AutoCAD 2004, I am unable to get beyond the error. The app always terminates. I have tried loading the app on a different machine (a laptop) and it works perfectly. Both machines run XP. Machine in question sports an ATI Radeon 7500. This machine also runs AutoCAD 2002 without any issues. I've tried uninstalling 2002 and re-installing 2004. Same issue. I've tried logging on as a different user. I've tried adjusting the Radeon 7500 color settings and turning HW acceleration down or off. The app will not complete it's loading so I can't get to <TOOLS> <OPTIONS> menu. Are there any command line switches I can use (ACAD.EXE) to disable certain startup calls to help troubleshoot? Any one know of what these might be? If anyone has investigated this problem and can help, it would be most appreciated by all who are having the same problem.
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