twod You need at least H11.0.480 to workaround the ATI driver bug introduced with the new Graphics Driver Update (Aug 19). For some reason, some textures that were generated by rendering to framebuffer objects would contain garbage unless they were first read back to system memory via a glGetTexImage() call. This affected the depth buffer texture primarily, which is why most effects stopped working along with the displayed garbage.
I'm running 11.0.497, is that not newer than 11.0.480?
Perhaps the workaround isn't being applied to your particular setup. If you do a Help->About Houdini, Show Details, what is the OpenGL Version and the OpenGL Renderer listed? The other issue could be that the workaround simply doesn't work on ATI 5000 series hardware (which I hadn't tested).