Anyone who is getting the block characters should try an older GSdx graphics plug in. I run PCSX2 with GSdx 890 plug in. Tried the newer GSdx plug in and got the block characters too. The game evens runs pretty well on my intel celeron laptop that has 1 gig of ram and intergrated graphics.
The shame is PCSX2 is a beast of an emulator. Shame there isn't a PCSX2 version just for 2D games. The pixel shaders would not be needed and processor speed wouldn't be such a factor.
Ok this is my first attempt to upload a zipped file. It can only be download 10 times so good luck. It is the GSdx 890 plugin I am using. Just copy and past it to the plug in file in PCSX2. I would back up your other GSdx plug in files first.
http://rapidshare.com/files/271779578/GSdx-sse2.zip.html