[Nemesis]

short answer
set
Bilinear Filtering | Enabled w/o Sprites ]
to
Bilinear Filtering | Enabled w/ Sprites ]
but like others have said filtering on 2d is dodgy.

on a side note does a Geforce2 MX have FSAA, i think it does but im not sure.

 

[Nemesis]

for petes D3D set filtering to standard or extended.

 

[Nemesis]

its like i said before, 2d filtering is dodgy, you either have it smooth with glitches or pixalated but clear.