In the dxdiag Display tab, did you try clicking the 'Test Direct3D' button? Do you have any other DirectX games, and are they having similar problems?
What resolution is your desktop set to? Try having your desktop colour depth at 16 bit (high colour) and the resolution the same as the game is set to (the minimum is 640x480, BTW).
When you un-installed the game, did you browse to the Beyond Divinity folder, and make sure there were no files left (except within the savegames folder) before re-installing?
Even if the reset button in the configuration program is greyed out, you can still delete the config.div, slashed.cfg and slashed-d3d6.cfg files in the Beyond Divinity folder (if they exist), to force the configuration program to recreate them the next time it (or the game) is started.
In the configuration program, does running the test cause any problems, or is it just the game?
