In the configuration program, have you tried setting the graphics mode to either Software or Direct Draw, rather than Direct3D?
Try checking the alpha bit option in the configuration tool and switching off fog in the video options within the game.

If you run dxdiag (click Start | Run, type in dxdiag and hit Enter), does it report any problems? There are a couple of tests under the Display tab.

After starting your computer, have you tried leaving it running for half an hour before starting the game? see FIX for splotch problem/weird color areas/fog