I have finally given up. Daily I have tried to fix this pile of crap. My choices are either get an nVidia card or get a refund. I am getting a refund from Steam.
Good luck with that.
I can "play" Rage with about eleventy three experimental config files, command line parameters, compatibility mode settings, .dll file transfers, and driver tweaks. One CPU is always at 100% and the GPU on my graphics card is so idle that it actually lapses into a coma, so the game runs like some spasticated spider with three legs missing. But hey, apparently I should be grateful that there's even a PC version or that it even runs at all. Apparently I should also pay homage to the creator and just svck up the £30 I wasted on gigantic piece of bloated fail.
Let me know if you have any joy with Steam and a refund.