Looks like your card doesn't support non power of two textures too well. RetroCopy autodetects this feature (your card says it supports it) however there are limitations with it on your card. Seems only ATI R6xx series finally got it right. Games usually always use power of two dimensions to limit any issues which is why you won't really see it.
What I'm going to do is enable a config option for next version which will force power of two dimensions, and I believe this should fix your issues. Forcing power of two dimensions on textures shoots up VRAM usage, so it could lead to slowdown if you don't have enough VRAM. I haven't checked how much VRAM RetroCopy is using, but I believe if you have over 128MB it should be fine.
http://www.opengl.org/wiki/NPOT_Textures