Sounds like you changed a setting which has turned the palette entry which is supposed to represent "transparent" into black.

Could be that whatever paint program you used scrambled the palette entries for you. (From what I've read lately, PSP is notorious for this, in spite of being on the list of recommended tools. There is a workaround but I'm not the person to ask for the details).

I'm hoping that you have multiple MTW:VI installs and can simply copy the ruined projectile graphics from the original installation to your modded installation, since they are likely to be packed into a CAB file on the CD and not so easy to find & extract, short of a reinstall of the game which might overwrite all your modding work.

Anyway, with the originals back in place, run a custom battle and see if the black squares are gone. If not, it could be a problem with your gfx card.

"Latest Driver" is generally a good principle but MTW is an old game and it's best to stick with ones which are known to work. It's when new games don't like old drivers that you should upgrade them.