I've got similar problems with the hardware rendering giving me really bitty looking particles.
When you've switched to Hardware renderer in the render settings try unticking 'High quality lighting'. This did the trick for me. If I remember rightly I used a radeon 9700 for a bit and disabling high quality lighting on that let me look through the viewport with the high quality renderer. I'm guessing this will be generic across many of the radeon cards.

Si