I tried to run the game on Windows XP Home Edition SP1 (power.exe) and it told me to set colors to 256.
So I told it to run at 256 colors in the compability tab and it worked just fine. The Desktop flickers a bit at the intro, but the game seems to run quite OK (Music is WAY too loud though).
You can also try to set the colours to 256 at this Screen property window thingy (don't know it's english name, but you know, that window were you also can set up you screensaver and desktop background and stuff)
If you tried that already, then I don't know any other solution either :/
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