The integrated S3 card you have is crap.
Yes you will need a better graphics card, Any Geforce or Radeon card is capable of hardware TnL, so really it just comes down to whether or not you have an AGP slot.
If yes, then take your pick, if not, then you are limited to PCI cards.
I am running Windows XP, AMD Athlon 2200+, 512 MB DDR SDRAM, integrated ProSavageDDR KM266 graphics card with 32 MB shared video memory. I want to play Final Fantasy XI. After I log on and hit "play" I get a msg that the game "terminated...failed to recognize hardware TnL. Please check that computer has required specifications to run FFXI." I'm guessing that I need to purchase a graphics card, that the OEM doesn't do the job. The Final Fantasy minimum system requirements SPECIFY either NVIDIA GeForce series or ATI Technologies RADEON 9000 series. Their web support is even more specific as to model #'s. Does this game really require those SPECIFIC brands of graphics card? Will I have to buy or install anything else? Does anyone out there have FFXI, and if so, what experiences/problems have you had? All answers/advice are appreciated!