Sorry, I mean "-gfxreset" starts the game in windowed and it runs fine. Changing to 1024 x 768 is the only resolution that will let me play at fullscreen. I want to save the resolution to 1024x768.
I've played with the settings and am kinda confused again. I can use -gfxreset, start the game in windowed mode, clear the launch parameter, exit the game and it does save the windowed setting like you said. Every time I start up the game it runs fine starting in windowed mode. If I change the setting to 1024x768, I am able to play the game fine at fullscreen. But when I exit the game and start it again I get the same graphical issue. It seems like the only way to actually start the game is in windowed mode