On the initial 'green' screen, where you choose what kind of game to play...
Go to option, then pick direct-draw in the window settings, third line. I could never get it to work with direct 3-d mode. For the record, mine says:
Start window Mode
TV Mode (Fast, default)
Use Direct Draw (Old)
VSync 59-61 Hz (Beauty, Default)
See if that works for you.