Question about video drivers

I'm not sure if this goes to the driver forum, or the hardware forum, or if it's OK here in the software forum.... anyway, I have a bet going. I say Pixel Shader 2.0 (and up) is hardware based, and all the driver updates and DirectX updates aren't going to change this. A friend of mine says you can install Pixel Shader 2.0 support with software. I say it's BS :crap He has a laptop that doesn't have PS2.0 support (Radeon Mobility 9700 video chipset with XP SP3) and he's on a quest to update it. I'm telling him that he's wasting his time.

(is Pixel Shader 2.0 the same as Shader Model 2.0???)