Can anything be done about the tearing, it's pretty bad.
What does the "Graphic mode setup.exe" do I don't see any changes in-game and the launch button does nothing.

Try forcing the games to run with vsync on if you use a ati or nvidia card. As for graphics mode setup I would assume that would allow you to change the way the game is displayed. Try running it with compatability settings to see if that will allow it to launch, if not it may be that gog disabled its function, though I can't say for sure.

Well I hate tearing so my vsync is always on, I also tried this:
set fulldouble to true so that you have double buffering and no screen tearing
in the dosboxtex4.conf but nothing has changed, it's like whatever I try it's like I've done nothing the game always looks the same, you can change the resolution, output etc.

I also have problem with tearing. Can this be remedied in any way? (I have nvidia card, vsync and triple buffering are enabled).