Thanks for the pictures for they clearly showed what is most likely causing the problem.
You most likely have Combat Detail set to Faster instead of Detailed.
As to windowed mode, for me, it worked to get the game running on Win 7, but after that I fly in full screen Glide mode.
I would suggest getting a Glide Wrapper. the one I prefer is here (Just Uploaded today): http://cid-e196374a237958b4.office.live.com/self.aspx/Public/GlideWrappers/CJglide2x%5E_02.rar
I however have 5 versions of Glide Wrappers to choose from and they can all be found here: http://cid-e196374a237958b4.office.live.com/browse.aspx/Public/GlideWrappers
The CJ wrappers are the easiest to use, just unzip the file and put glide2x.dll into the RedBaron3D folder. Then go to preferences and changed the graphics from Windowed to Glide.
If it works, then add some nicer Terrain. I prefer Promised Land 2 which can be found here: http://cid-e196374a237958b4.office.live.com/self.aspx/RBFILES/PL2PLv1.rarFiles.rar
Place the three vol files in the 3dpatch folder (RedBaron3D/Data/3dpatch)
You can get Promise Land 1 terrain Tiles and other add-ons for PL2 from Swordfish (http://www.rb3d.net/Swordfish/links.htm
) However, some folk with Win7 have problems with the PL1 terrain due to it's non-stock palette (I am one of them). PL2 uses the stock color palette and therefore does not cause crashes to desktop when exiting a mission (important if you want to fly the SP Campaigns).
Then you can also try MultiPlayer (I was on two nights ago and there were four other flying), but to do so, you need to do two things. One is Update the MPlayer.ini file, and two, replace the Baronmmp.exe in you GoG version.
Start with the GoG version of Baronmmp.exe. Reason: A number of the servers that are up run security, and the GoG version of Baronmmp.exe does not pass the security. The reason is there is a CD check in the game and GoG removed it so you will not be asked for the CD. That is great, but changes the checksum of the game so the servers with security boots you off. Now, i have the stock, properly patched version uploaded here: http://cid-e196374a237958b4.office.live.com/self.aspx/RBFILES/Baronmmpexe.rar
With this one you will get a small screen asking for the CD. You do not need the CD, all you need to do is left click the upper right cross six times and the game will start!
The second thing you need to do is update the MPlayer.ini file. You will find MPlayer.ini in the Red Baron 3D folder. Open it with Note Pad.
Under the section [KNOWNSERVERS], delete all of the servers listed. they have not existed for years.
Replace all of the servers listed with the ones I have below:
Server=TCP:220.127.116.11:6001 ; Redux
This will allow you to see the game servers. The servers are not very active, but players do fly, usually at night American time. I have not flown online much in the last few months, but I have been in online games with about 10 others
Good Luck, welcome aboard, and hope I di not over whelm you with all this added info :)