I've installed direct x, the recoomended direct x from the star wars website, and reinstalled my graphics driver twice. I'm running it in windows xp compatiability mode. The game gives me this error after pressin single player and then "stops working"

The game uses OpenGL, not DirectX. That's not something that you can update, aside from updating your video drivers, which you've already done, but knowing that could help you solve your issue, regardless. For example, you might try an OpenGL-to-Direct3D wrapper like the following:

https://sourceforge.net/projects/gldirect/

Simply extract \bin\release\opengl32.dll to your game folder.

Besides that, you can try turning off "GL extensions" in the video settings. Also, if you have EAX enabled under Sound, try disabling that, just in case the error actually means 3D audio hardware (slim possibility, but try it).

Finally, you could try running the game with the " safe" parameter in your shortcut.