Like the title states, the graphics flicker when moving when fully zoomed out. I'm at the very start of the game and the trees and houses flicker when moving. I can not play the game like this as I feel like my eyes will start to bleed if I continue.
I've tried messing with all the graphic options, and increasing my screen refresh rate as well. Nothing seems to have any effect.
Anybody have a solution to this?
I have the latest drivers for my Nvidia Ge-force FX5200 graphics card.

I have this problem as well with an Nvidia Geforce 9800.
Has it ever been solved?

You might look at this post for starters.
What OS are you using?
Is your CPU a dual core or single core? Is it an Intel or AMD?
Did you install as an administrator (Vista / Win 7) by right clicking the setup.exe and clicking "Run as an administrator" from the resulting dialog?
After installing, (Vista / Win 7) did you right click the shortcut, click Properties, click the Compatibility tab and check "Run this program as an administrator"?
Did you try the Compatibility modes?
Sorry for all the questions but it helps to know . . . =)

Sorry for leaving that bit out. I'm not running Vista
I'm running WinXP Pro SP3
Intel core2 duo CPU
4 GB RAM
Geforce 9800GT vid.
No A/V running.

I assume you tried all the other modes as well. We are running almost identical systems except mine is a core2 quad. with a 9500GT. So far, it runs great for me.
I had to Alt-Tab out of SG and give my firewall a consent on several dialogs it was throwing up before SG ran properly. I use Comodo but other firewalls may do the same. SG wouldn't allow the dialogs to show and when I closed the game, the dialogs closed. Only after Alt-Tabbing out could I see and confirm the dialogs.
I also had to update my video drivers as well.
I do use RunFirst to set the affinity to a single core. This link will take you to a post which has an example of the path syntax for the game shortcut and a link to the free Runfirst program. You would need to put the RunFirst.exe in a directory and add the path to the front of the target path, enclosed in quotes and separated from the game path by a space. Should be an image attached for an example.
If this does not help you might try changing your setting in the Nvidia control panel under Manage 3D Setting, Program Setting tab. You can save the changes and overrides will be used with SG every time it runs. . . . =)
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Edit: I found this on another forum but couldn't find the post here on GOG. This is the quoted solution for another person here in the GOG SG forum. The Config.exe is locate in your SG install directory. I have attached an image of the checkbox they refer to.
"I was having FPS issues like many of people in this thread, and I tried all of the options listed in th is thread - nothing really worked. Today however I tried something at random because my display didn't come out of compatibility mode when exiting the game at one point:
I opened up the configuration tool to see if there was an option to use Software renderer - didn't remember and, of course, it wasn't there. There was, however, the option to use 32 bit color - I checked that box and then turned off all compatibility settings for sacred.exe (GoG by default puts it into 'Disable Themes'. With no compatibility and the 32 bit color depth box checked I found myself playing smoothly!
I don't know why this worked or if it will work for others, but thought I would share.
NOTE: I have forced AA to 4 in nVidia Control panel and forced VSYNC and Triple Buffering in nVidia Control Panel; Everything I have done combined seems to do the trick."