No particular graphics options are required for multiplayer, just that you can run the game in general (and SM 2.0 will allow that much). The GeForce FX series does have SM 2.0, so you should be able to play.

That generally indicates that your video card does not support Shader Model 2.0, which the game requires (as above). The debug.err file located in My Documents\My Games\PolMachine2008 will tell what exactly you have, to confirm this. Unfortunately if you do indeed have an unsupported card, your only options are to return the game, or upgrade/use a different machine.