Have you ever get a problem like this?

glad you found the problem.

also glad it isnt the "alpha demon"! :)

it did look like an alpha problem, but with
the benefit of hindsight i can see that the
face clipping is far too irregular to be an
alpha issue.

you might also want to try downgrading to dx 8.1,
this being a dx 8 engine... em, i think.