ATi have released a new set of Catalyst Drivers version 4.91 that fixs the Psychotoxic Demo:

Attempting to start a new game of Psychotoxic may result in the game failing to respond or producing a VPU recover error. Users who are experiencing this issue are advised to download and install this driver hotfix. A future CATALYST release is expected to address this issue.

Catalyst 4.91

ATI