Appears to be related to ATI and DirectX drivers. That of course doesn't rule out hardware issues, but my first guess is that it's a driver one. Even if your drivers are up to date, they can get corrupted, or a component doesn't install completely, etc etc.
I'd make sure all Windows Updates patches are applied, then uninstall ATI drivers from the Control Panel/Programs panel, then run
DriverSweeper. Then, Install Catalyst for your card
from here, if your Windows is 64-bit, or
here if 32-bit. Also
update your DirectX. Reboot as requested and at the end of the procedure.