I seem to have fixed most of my flickering issues with BG&E and thought I should post my settings just in case it can help
Resolution: 1440x900
ADVANCED SETTINGS
Water Detail: Low
Antialiasing: Off
Flare: On
Shadow Quality: Off
MANUAL COMPATIBILITY
HW Vertex Processing: Off
Multi vertex System: Off
I did NOT change the core affinity to a single CPU
I tabbed back to windows and STOPPED the Run.exe that launches with the game
I forced the lack of antialiasing in the nvidia control panel but I don't think that'd make a difference.
There's still the occasional flicker here and there but well within bounds of playability. Most importantly, there is almost no slowdown in the city or when in the hovercraft. I had a bit in a cutscene but not too insufferable.
I also updated my video drivers with the custom cfg versions from laptopvideo2go, good if you're on a laptop, presumably less so for other people.
Hopefully this will help someone else.

Helped me a lot when using the hovercraft especially in the city, thanks for the advice.

I only had to turn off HW Vertex Processing to get rid of the flickering.

Results seems to vary, sometimes I just need to disable the HWV and at other times the shadows needs to go.
For those who dont want the sync fix/CPU hog run running and find alt-tab a bit flakey just make a shortcut to bge.exe. If you are on Vista you can add the shortcut and set it as default bu customizing (rmb) the BG&E entry in games explorer.

I too had graphics problems with this title. My desktop specs are as follows:
Acer Aspire AMD Atholn X2 255 Dual core , running Win 7 at 64bit. My graphics card is a NVIDIA Geforce 9200. I'm runnin this game at 1920 X 1080.
The file SettingsApplication can be set as follows: run it, then select your Advanced settings tab. On the right wth the "Compatibility" settings, which there should be (8). I've found I can select all of them BUT the {HW Vertex Processing} one. Uncheck it, and I'm pretty sure you can run with no flicker in probably any display mode. I hope this helps.