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?

Try disabling the anti aliasing in the configuration tool. If you want some AA just use your graphic card control panel
Good luck ;)

Yep, AA is already off as are shadows, water and HW Vertex processing. Glitches are fixed but the framerate has taken a hit. So AA isn't the issue.

one you start the game, try tabbing back to windows and going into task manager, terminate the process run.exe and see if that helps, works for me.

I had the same issue, and turning HW Vertedx processing off while leaving everything else (including AA) on worked great. No performance issues either.
If disabling AA solves the issue too, that should give you better performance.

No offense, but I feel like some people aren't reading my message. AA has never been on, so it isn't the issue.
Shakey-Lo, turning HWVP back on causes the problems to come back.
Aliasalpha, I'll give that a try when I get home and let you know.
Thanks all!

Well, you didn't say whether you had AA on when you got the glitch, just that the glitch went away when AA and other things were disabled. So yes, we did read your post. ;)
But if AA wasn't even on when you got the graphics glitches, I agree, it's irrelevant. :)

I guess it wasn't completely clear. When the glitch began, AA was off, shadow detail was on low, water detail was on high, and HWVP was on. So really, the only change I made to fix the issue was turn off HWVP. It worked, but it also hit my framerate pretty hard.

My monitor is the same resolution as yours & my video card is practically identical too
I suspect playing this game in wide screen also causes flicker issues, try playing in a 4:3 resolution , I play in 1280x960, this is the highest resolution supported by the game and your monitor.
Works for me here.

I gave this a try, and it didn't help. I also tried tabbing out of the game and closing the run.exe program. That didn't help either! I've tried turning everything off, and just about every other combination possible. I even made sure that I had the most recent drivers installed!
Here is what I know. HM Vector Processing is the problem. I know it is the problem because turning it off is the only thing that fixes the flickering/tearing problem. However, turning off HMVP also causes a huge hit to the framerate, to the point that the game isn't playable.
I know I don't have a fantastic video card, but it should run this game without problems! And I don't suppose there is a return policy here at GOGs...

What's your processor like? If it happens to be really crappy that could be the problem as Ubisoft is known for their sloppy PC ports and sloppy PC ports usually depend on the CPU more than anything else.
Other than turning Water to low (I believe you said you've done this) there's not much else I can do. BRB more researchan.

It's pretty good I guess. Intel Core 2 Due T7300 2.00Ghz

Turning off HW (Hardware) Vertex Processing basically means the "Vertex Processing" is taken off your hardware (the graphics card) and given to the software, which means your CPU has to do it. At least that is my understanding. So the poor framerate with HWVP off is not to do with your video card but is probably due to BG&E (like most older games) not being designed for multi-core CPUs. So the only thing I can think of is to make sure you are running the game on one core, if you haven't tried that already. Open up task manager, right click BGE.exe and set affinity to one core. If that doesn't work I'm afraid I can't help any further.