Check here http://forum.jowood.com/index.php?f=812 I think I read something about this sort of issue. Do you have Fraps running that can cause odd graphics issues.
I have had this issue with two different games before. Have you made sure you are running the latest graphics drivers. Try verifying your game cashe (I take it you bought it off steam?)
Cheers for the replies, nope no mods for it, this was my first launch. After verifying the game cache I can no longer launch the game at all (get the app stopped working message). I'll give reinstalling a go.
There was a thread I read through on the Jowood forums with a guy who had the exact same problem. He reformatted his HDD and reinstalled windows and the problem still wasn't fixed... not looking too hopeful
EDIT: The game reinstalled PhysX after I verified the cache again and it's working
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