Do you by anychance have a joystick or something other then just the keyboard and mouse plugged into your pc?

I did, but removing my joystick didn't seem to change anything.

Does the game have a graphics mode setup file where you can change how its rendered? You should beable to find that in either the start menu with the game or in the games actually folder if it excists.

Nope, the game is strictly directdraw and 640x480. There aren't any settings for detail levels and opening the configuration file doesn't show any such options either.

I changed my video card last month and decided to install this game again to see if the change in hardware would make a difference, and it did! I used to have issues with video playback and the cursor was invisible but now everything works fine. I can only assume that one of the 3 following things caused the issue:
1. I was using an integrated graphics chip and it was incompatible with the game.
2. I installed a Hybrid CrossFireX setup and it was causing the graphic glitches.
3. The drivers I was using were causing the problem.
If anybody has the problem I did try updating your drivers and disabling CrossFire.