I had the same problem with the waving grass shader, and I too have a GeForce 3. It appears that the GF3 only has 1.1 shader support, so if you change the "ps.1.3" to "ps.1.1", it will run. With the waving grass shader, this worked perfect. However I haven't tested this shader yet, so I'm only guessing that it would also work for this too.