HWA Doesn't Help

[Jaffob]

Press Win+R, enter dxdiag.
Check for "System->System information->Direct X"
If it's below DirectX 8, you're screwed.

That's wrong.
You can have Direct-X 9c installed (and probably do, as it comes with Windows XP and above) on a graphics card that doesn't support it.
The only real way to find out is to go to the display page of dxdiag and run the Direct3D tests. I think the "DDI version" on that page could be your graphics card's hardware Direct-X version support, but I'm not sure. The tests will definitely say.

I did the tests. They displayed a spinning cube perfectly without lag or apparent glitches. So if these tests work, why don't shaders work.

As for what you say about the play area: The games with the most slowdown have sizes 10000x600 and 1980x3000.

[Sphax]

Are you sure to have set your game to "Direct3D 9" Display mode?

[Jaffob]

Yes.

If I just create a blank project (with Direct3D 9 display mode), add an active object, and give it a shader, the shader is never displayed. I also downloaded Looki's ShaderPack, and the example file just displayed an image a bunch of times.

[Sphax]

That's probably a bug... Yves should have a look at it.

[Yves]

I did the tests. They displayed a spinning cube perfectly without lag or apparent glitches. So if these tests work, why don't shaders work.

Any card can display a spinning cube, shaders are a different thing. Does your card support shaders? Create a new application (with the latest HWA version), add a counter, in the event editor add : Start of frame / Set counter to PixelShaderVersion and then run your application. If it displays 0, then your card doesn't support shaders. If it displays 104, that means it supports shaders v1 and not shaders v2 (the required version is displayed for each shader in the Effect list in MMF2).