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high rated
After seeing how a lot of you had mouse graphical problems, I decided to post and explain a solution that worked for me. You'll need a simple free program called DXWnd.

This fixed the mouse graphic bug that causes trails and improved the framerate.
I tried this on two different computers (both Windows 8.1) and on the original Lionheart as well, and it worked on all cases. Below are all the steps needed to make Lionheart run properly; don't worry, it's really simple.

Steps:
1 - Download DXWnd. (I'm not allowed to post a link, so google it and download it from the website SourceForge).
2 - Unzip the downloaded file wherever you want (it doesn't require installing).
3 - Open dxwnd.exe (I recommend running it as administrator).
4 - A window will open. In the white space, right click. A menu with different options will pop up: select "Add".
5 - A menu will appear. Where it says "Name" just type "Lionheart"; where it says "Path" right click on the icon to the right with three periods and select the Lionheart executable (it will be where you installed the game).
6 - In the same menu below there's an option "Run in Window"; uncheck it to run the game in fullscreen.
7 - Click OK.
8 - On the white background you should see the text "Lionheart" with a green round icon.
9 - Left click where it says "Lionheart"; the text should be selected in blue.
10 - Right click the text and select "Run".

Everything should work.

When you are done playing close DXWnd. It will show the message "Task list has changed. Do you want to save it?". Click YES. Everytime you add a game it will ask you the same.
Next time you want to play Lionheart, open DXWnd, left click Lionheart, right click and select run.

Please post here if it worked for you or not.

Cheers.
This fixed the mouse trail bug, but it didn't improve the performance. Still getting 45-50fps or worse.
This worked flawlessly for me, thank you very much!!!
fucking cheers man, I'd been trying for weeks to fix this problem.

Thank you so much. :)