Fullscreen doesn't work for Dragon Raja if you have an ATI GPU and use the latest ATI drivers. To fix it, you have to downgrade your drivers to the 9.9 version.
It actually depends on the graphics card as well and 9.9 isn't the only working version.
I use an ATI card - a HD4670 and my driver is 10.2 I think. Just test around until you find a suitable driver for you that works. You should user older drivers for older cards anyway since they're more compatible and there's nothing new for you in the newer drivers ( that's why I'm not updating, the HD4xxx series stopped receiving software updates ).
Rendering problem would make your game run slowler, but not like when you lag. When you lag, the scenario still changes as usually, but when you have rendering issues, the game stucks untill everything is rendered... or something like that ;P
So i doubt it would be rendering problem in your case.