1) Shaders - term used for computer graphics for shading by applying levels of colour within an image, or to produce special effects or video post-processing, like a motion blur.
2) That could be the case, it depends on the system requirements of the game. It could alternately be Wine failing to detect the hardware’s capabilities.
The system requirements state:
Video card with 96MB of memory with OpenGL support and the latest drivers
But looking up your graphics card, it says:
Max. Amount of Memory 64 MB
So, there is a chance the hardware doesn’t support it. Have you used this software on Windows on the same machine before?
I found this where another user concluded the software is just broken on newer versions of Windows, so the software itself may be at fault.
3) Being an ATI card, AMD may have their own proprietary drivers. By default, Ubuntu MATE will use the open source drivers. You can check this under System → Preferences → Hardware → Additional Drivers. Being an old card, their drivers can be worst off then the open source ones, so please do backup beforehand.
To test OpenGL, you can type this into the terminal: