As many have mentioned before it's another color issue.
I've tried all compatibility types, I've reinstalled directx, I've reinstalled the game, I've tried different install directories, I've tried 256 colors, I've tried unofficial patches, I've written a batch file to disable explorer.exe

Seems no matter what I do the problem persists.
As for the exact nature of the problem...
Unit sprites and the mouse have corrupted colors, akin to the flickering pixels akin to the 9+ player glitch from StarCraft mods. It makes the game a bit difficult to look at, and makes it tough to tell units apart by faction and their stances as the shields and their letters are completely unintelligible. Typically a mess of pure white and teal.

I'm running Windows 7 Professional Edition.
I can take a picture later tonight if need be, screenshot attempts all fail.

You know, I'm going to feel really stupid now, but I'm starting to think these are the intended colors.
They're just so mismatched from the background that I assumed they were bugged... Like when I first plaged Rise of Legends and wondered why the units move at 12 FPS but the buildings 30 FPS...

Edit: Your post did help me make the game run at native fullscreen though, so props for that.