I figured out the problem. I needed to download the full update, rather than the 07/30/07 test update that is listed below. I first downloaded the latest install and the 07/30/07 test update, and graphics did not work even after running the regsvr32 GflAx.dll command. I then uninstalled, re-downloaded the installation, downloaded the full update and then ran regsvr32 GflAx.dll. After that graphics worked. Problem solved.
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