I'm running a NVIDIA GeForce 8600M GT at 1680x1050. Windows Vista 32-bit. 2GB RAM.
When I run the game, I get all kinds of visual glitches. The screen flickers, eyes pop out of their socket, textures tear off their frames, etc. I have read that turning down water detail and shadows, turning off antialiasing, and turning off the HW Vertex processing fixes these problems.
While it does fix all of these problems, the game takes a huge hit to its framerate without the HW Vertex processing enabled.
Solutions? Thoughts?

For the framerate issue, try setting your games cpu affinity to just 1 cpu. Do this by
-Running the game
-Alt Tabbing and opening task manager
-On the Processes Tab, find the game's process.
-Right click the process and click on set affinity.
It should have CPU 0 and CPU 1 checked. Uncheck CPU 1 and try to play again.
Just a note. If you play an older game and the frame rate seems to speed up at intervals. this trick works well also.

Hey Saved! I just managed to get rid of any screen flickers and such.
When Antialiasing was turned on in the the Advanced Tab of the SettingsApplication, the flicker and popping was all the more visible.
First enable HW Vertex Processing again and all the other ones too (except for W buffer) in the advanced Tab. Now go to your Nvidia Control Panel then 3D Settings>Manage 3D settings. Select the "Program Settings" Tab and add an Application. Choose bge.exe. Now change "Antialiasing-Mode" to "Override any application setting", choose in "Antialiasíng-Setting" anything you want. It won't affect the AA used in game anyway, though I would take "2x" just to be sure it won't affect performance too much. Check also if "Texturefiltering-Anisotropic Optimization" is deactivated and "Texturefiltering-Negative LOD-Bias" is set to clamp.
Click "Apply". You should now have no flickering or such anymore with or without AA.
(Note: I set "Anisotropic Filtering" to 16x, but it probably doesn't affect anything. It's the AA override that fixed it for me.)
BTW: I see you're using 1680x1050 resolution. If you're annoyed by the stretch caused you can actually play the game in a 5:4 aspect ratio without that stretch. I'm able to play the game in the 1313x1050 res. Same procedure Nvidia Control Panel > Display > Manage Custom Resolution > Create > Width: 1313 Height: 1050 click Test > check if it works (Yes, No) . Your custom res should be added and you can now pick it in the SettingsApplication. ;)

There are a few ideas I could pass your way. It might be wise to create a restore point before you do any of this, just to be on the safe side. If you have the latest drivers (which you do), try rewinding your settings to an earlier driver version, at least for that one app. Change some of the setting in your GPU control panel. For example, if you have SLI configuration, disable it, as that can play up with old engines. It shouldn't, but it does. Any modern technology can fuck up old software, so keep a look out for anything like that.
Those are all the basics. Whatever the case, you need hardware vertex thingy on because otherwise it'll try to run everything through your CPU (I think). I have a pretty high end computer and I get choppy framerates when I run something as basic as Carmageddon with software rendering, so the solution is to get HWVP to work. I also suggest setting the OS compatibility to XP, also try switching between OpenGL and DX (version 9c if you're still having trouble). I doubt any of that will work, because it seems like a hardware issue, but you have to go through the hoops first.
You can also ask and [url=http://z6.invisionfree.com/BGE2_Revolution/index.php?showforum=9]here if there is still no resolve. Bit of a last ditch effort, but there are some real tech-heads on those sites.

Thank you all for your help! I've been screwing around with several different combinations of the suggestions made here, especically in the nVidia control panel. Nothing has worked yet, but I'm going to continue trying different combinations.

Just bought this game. Had some graphical glitches but after some trying and failing it seems to work with 4xAA, 16xAF, High Quality filtering, clamp LOD and everything in Advanced Settings to On/High.
Thanks to pops117 :)
Oh, I got a Nvidia 9600 card with 182.06 drivers running on Vista x64.
Edit: I used imagecfg.exe on BGE.exe with the parameters "imagecfg -a 0x1 c:\path\to\BGE.exe" (Remember to run with admin rights). Not sure if it helped, but I've not seen a glitch after doing that + some other stuff.

You running a dual core cpu? Try tabbing back to windows & terminating run.exe in the task manager, that helps my slowdowns for the most part.

Thanks guys, I have now tried everything listed in this thread, plus several things I found in other forums, plus a few other random things I thought of myself. I really appreciate everyone who took the time to help me get this game working. I can only conclude that this game is incompatable with my hardware configuration.
Should have burned my 9.99...at least then I would have had a cool flame to stare at!

Strangely, this holds the key! If I turn off HMVP, the game runs terribly slow. If I tab out and turn off run.exe, still runs slow. However, if I run the BGE.exe directly with HMVP turned off, then the game runs brilliantly! It would seem that in this case, GOG actually caused my problem by trying to fix other's problems. Yea! Now I can play the game!!!

I have the original game, and switching off HWVP and setting the resolution to 1280x960 was all I neded to do to get the game working on my XP PC with 8600GT 256mb card and dual core 2.8ghz AMD XP CPU.

Hey everyone, I just wanted to add my personal thanks to Pops for his help :)
Not only I got rid of glitches and such, but the game looks spectacular now. Thanks again man!

No problem, really. I'm not sure if I made it clear enough that you can go on and enable full AA in the advanced options tab of the "SettingsApplication" without any flickering anymore. If your machine can take the hit, then don't shy away from enabling. Just mentioning it ;)

I had the same problem.
This solved it for the most part. Thanks pops! I still see a ton of flickering when I'm at the top of the lighthouse though.
Anyone have any idea what that could be?
Running Vista with a Nvidia 8800GT OC

Ok, this one is already solved, but I wish to reiterate that it does in fact work. (I am operating on same specs as orignal poster, and would imagine that he's also on a two year old Dell Inspiron.)
Just turn off the HMVP and run from standard and not installer .exe file. You will get some off-synch in longer cutscenes, but ti does not affect gameplay, and is something you can survive to have the ability to play this magnificent game.

M1530 Dell Laptop (T9300 / 3GB RAM / 8600 GT / running on Windows XP 32 bits SP3) here.
I tried everything but I can't get it to work right.
If I let H W Vertex Processing ON I will get glitches.
If I put it on OFF, the performance is absolutely terrible (a real waste of ressources : this is a 6 years old game)
This will get me rid of most glitches but even then the water is buggy.