This useful mod alters BioShock to support Shader Model 2.0 for older graphics cards. Instructions:
Replace shader.spk in BioShock's folder with the one provided.
Open Default.ini in a text editor and find this line: UseSpecCubeMap=True;
Change it to "False," save and close.
Delete the Bioshock.ini file from your \Application Data\Bioshock\folder