Hi,
I found a fix for the main menu and transparency glitch in the game. I just copied the textureformat2 string to textureformat1 in GAME.INI. so your ini should look like this:

[GAME]
TextureFormat1=32 0 0 0 65 0 0 0 0 0 0 0 32 0 0 0 0 0 255 0 0 255 0 0 255 0 0 0 0 0 0 255

Haven't tested this extensively just on level 1 with nvidia hardware.

Thanks.