When I've installed the game on my Windows8.1, had the same problems with the performance (had no problems on Windows 7). I tried different compatability options, but it did not much. Using of DXWnd to run the game helped me out. Game runs smoothly in 60 fps with any resolution.
Did you use the template already present in DxWnd \export folder or a custom one?
I did a quick test with it, and while it runs OK in a 1280 window, I get tons of visual artifacts that makes it unusable
When I used DXWnd to run the game for the first time with the default preset of options, it worked perfectly. So I did not change anything. I play it with fullscreen 1280 resolution and no problem here. I did not try to run it with special template.
Some of the problems can be related to graphics card drivers or DirectX.