Hi, I might be able to help. First a question: Do you have borders all the way round or just at the sides?
Anyway, it sounds like your graphics drivers are set to centre the image instead of scaling it. I'm not familiar with ATI's laptop drivers, but I imagine somewhere in the driver control panel there will be a setting with options along the lines of "Centre Image", "Scale Full Screen" and "Maintain Aspect Ratio". It sounds like yours is set to the first option.
Scale full screen will (as it sounds) fill the screen, but since your screen is 16:9 it'll stretch horizontally. Personally, stretched games bug the hell out of me, but you might prefer it.
The last option,
'maintain aspect ratio' will scale up to as close to full screen as it can get without being wonky. You will have narrow black areas at the sides of the screen. This is my preference, but the bars might bug you.
My recommendation would be to use the '3x nearest neighbour filter' in the setup program, uncheck the 'side borders' and 'letterbox' options and then pick 'maintain aspect ratio' in your graphics card options.
Lastly, the error you get in that screen shot is perfectly normal. One of the plugins used in the game (the rain one perhaps?) doesn't support Direct3D.
I've added some pictures demonstrating the difference between the different graphics card options.
http://dl.dropbox.com/u/992948/80758bh43kb3/4358hbbk/geminirue%20centre%203x.jpghttp://dl.dropbox.com/u/992948/80758bh43kb3/4358hbbk/geminirue%20maintain%20aspect.jpghttp://dl.dropbox.com/u/992948/80758bh43kb3/4358hbbk/geminirue%20stretched%20argh.jpg