As of 12.6 AMD has changed how they handle the drivers for HD 4000,3000 and 2000 series cards, they have stated this "AMD Radeon HD 4000, AMD Radeon HD 3000, and AMD Radeon HD 2000 Series have been optimized to their maximum potential from a performance and feature perspective." and now their intention is only to "resolving application specific issues and critical updates"
You can read the full article and even download the 12.6 Beta drivers for those series Cards here:
I have a new fix here:
12.4b drivers work to stop the pixelation issue but you half to take an extra step to get the problem to go away.
First off download the 12.4b drivers here:
Now then you must completely uninstall your current drivers you are using, when finished you will be prompted to restart, click No.
Go to your device manager, then go to display adapters. Under display adapters right click on your ATI video card device and select uninstall, when prompted too confirm the uninstallation (dont bother with the check box asking to delete you dont need to).
By doing this it will revert your screen to a low res VGA setting running without video card drivers. Now reboot your system, once loaded up run the 12.4b driver installation once finished, reboot once more and your screen resolution will be back to a higher setting (adjust if you need).
This should fix the pixel issue and Diablo 3 will be running just fine. I have done this myself on my HD 3870 card, it is working great.
For those wondering I havn't try'd the 12.6 beta drivers (that are specfic to HD 4000,3000 and 2000 series cards) yet to confirm if this method fixed the pixel issue as well but anyone is more then welcome to try.
Anyone with an ATi HD series card has been reporting Pixel blocks around lighting effects.
This has to do with the ATI Video card drivers, the fix unfortunately is to roll back to a much older driver version, ive been testing all the packages and found you need to roll back all the way to the 2010 September release to fix these issues, hopefully AMD has this fixed with their 12.5 driver release.
But for now you will need to download the 10.9 driver package, uninstall your current drivers, reboot, install the older ones, reboot once more and the issue is gone (it is important that you do a full uninstall and reboot before doing the driver downgrade as it will not downgrade properly if you just run the old installer on top of your newer drivers). Hopfully using these older drivers doesn't cause issues with other newer games but since the HD 3800 series card is pretty old it will probably be fine.
32bit Driver Download Vista/Win7:
http://support.amd.com/us/gpudownload/windows/previous/10/Pages/radeon.aspx?os=Windows Vista - 32-Bit Edition&rev=10.9
64bit Driver Download Vista/Win7:
http://support.amd.com/us/gpudownload/windows/previous/10/Pages/radeon.aspx?os=Windows Vista - 64-Bit Edition&rev=10.9
People have reported having this issue on the follow series of cards:
HD 3200, HD 3400, HD 3600, HD 4200, HD 4300, HD 4500, HD 4600
So far Working on:
HD 3400, HD 3600, HD 3800, HD 4200, HD 4300, HD 4500, HD 4600
If you have one of those series cards try this fix and see if it works for you as well.
Blizzard if your reading this maybe sticky or add to one of your current stickys?
EDIT: I noticed lagging too with the 10.8's specially in WoW, when I was testing the 2010 releases I went down to 10.6 first it worked so I went up to 10.12 it didnt, so I went in increments of 2, 10.10 didnt work 10.8 did and I stopped there. I just switched to 10.9s the fix is still tehre and also fixes the video lag I was experiencing.