the rabbit hole goes deeper than I had imagined..
Turns out it is a common problem with lazy ports - bioshock among others also required shader 3.0 support. Probably because xbox has a shader 3.0 chip and the devs did not bother adding shader 2.0 support to the pc version of their games.
However COD4, a console port, OFFICIALLY WORKED with shader 2.0. Here the devs did bother to make the game as compatible as possible with the PC platform..(unlike in bully's case) by adding shader 2.0 support.
In bioshock's case there is a community made patch , enabling the game to run beautifully with shader 2.0 itself.
Which is great news.. since it creates the possiblity of a shader 2.0 patch for bully.
EDIT: attempted to FIX HORRIBLE ENGLISH :oops:
btw crysis had shader 2.0 support..