Thanks fellas. Problem sorted.

Shame I'm stuck without the 3d hardware acceleration, but hey, it's still the same game.

Cyphox - have you tried going to Run, typing dxdiag, going to the display tab and disabling Direct Draw? That allowed me to run the game in software mode in fullscreen without any prblems. disable multithread processing in Grim.exe and turn of any antialiasing(GF does not like newer nVidia cards) or...