I had the exact same error message but have an ATI 4870, so I didn't think it was the drivers.
Fixed it by:
- installing the demo
- tried running the demo and got same error
- went into the demo\game config file and set the screen resolution to my default (x-1920 y-1080).
- the demo started working!
- this created and .ini file for the demo.
- went into the users\
yourname\ documents\games\kb demo folder and found the .ini file.
- copied this into the full game's \documents\games\armored princess folder.
The full game started
Hope this helps some people.