In software mode, I had the wierd color problem, and THIS actually fixed it, found on another game section on this board... I was amazed it worked, but now is running great at 1024x768, totally smooth, and proper colors... wierd!
"For messed up colours apparently if you right click on your desktop and then open up the screen resolution window and just leave that open in the background when playing games it for some random reason fixes colour issues. Not sure if it will work for this game but it has worked for at least 2 others. "
And this is not my fix, just found it in another thread. Was posted by Ralackk
EDIT:
Ok, further testing, and this does work great, but also I set compatibility mode to Windows 95, and clicked disable desktop composition and disable visual themes. Also clicked run as administrator. This, along with having the above mentioned screen res window open on the desktop before I launch the game, I can play @ 1024x768 in windows 7 64bit in software mode just fine. Runs great. Good luck!
Post edited February 18, 2010 by be77solo