I had the same rainbow effect with Santarium and Starcraft on Windows 7. For Starcraft all I had to do was load the game, alt+tab out, then alt+tab back, and it was fine.
For Sanatarium, this didn't work. The fix I found was weird, but effective. Before opening the game, I'd right click on the desktop, go to Properties, click the Settings tab, click the Advanced button, select the Monitor tab, and leave it there. Load the game, and it was perfect, no rainbow effect.
I'd try both of these. One might work.
Post edited January 12, 2011 by james5272