You wouldn't know how excited I was to play this old favorite of mine again, especially with the GOG promise of working on modern systems.
Well, that promise did not materialize, and I now feel like a fool for paying for this.
--- Rainbow color palette that eventually went away IF you kill explorer.exe (that's cool, it's not like it has anything to do with your OS anyway)
--- Inability to run in D3D or Glide modes -- yes, I tried the various suggestions here-- at least the ones I could understand.
--- And the broken AI, spazzy wheels...
What a mess. I just wanted something that "just works".
You know, GOG, if the game had so many game-affecting problems, you should have fixed them before releasing it. Or, if it was not possible to fix it, don't release a broken product. At the very least, TELL US BEFORE WE BUY IT that it doesn't work.
FWIW...
-Windows 7 64 bit
-ATI 5850
-4 GB
-Intel i5 750
-and one broken game

http://www.gog.com/en/forum/interstate_76_arsenal/the_groovin_amp_039_i76_workaround_thread
http://www.gog.com/en/forum/interstate_76_arsenal/contacted_gog_support
Yes that is unfortunate.

Hey, I was experiencing the same problems with Win7 64bit. This fixed it for me:
+ dgVoodoo (to emulate a 3Dfx card), download and extract the tool in the main install directory of either Interstate '76 or Nitro Riders
+ Run dgVoodooSetup.exe
1. Set 'Renderer API' to Direct3D9 in the Global tab
2. Check 'Monitor freq is the closest supported freq'
3. Check 'Force trilinear mipmapping'
4. Check 'Autogenerate mipmaps'
5. Check 'Texmem scaled to 4MB'
6. Set LFB Access to 'Enable FFB access' (should be the default setting)
7. Check 'Use hardware cache buffers when poss.'
8. Check 'Use fastwrite for unmatching formats'
9. Check 'Closer to a real hardware'
10. Set Texture mem size to maximum (65536 kB)
11. Set Resolution to your native resolution
12. Check 'Enable Glide-gammaramp'
Click OK to confirm. dgVoodoo will now automatically handle Glide for Interstate '76. No further action is needed for using this tool.
+ put atiumdag.dll in main Interstate '76 folder (only for ATI users, copied from Catalyst 9.5 driver)
+ Windows 95 compatibility mode on the shortcut and i76.exe
+ batch script, use the following 4 lines, create with Notepad, change .txt extension to .bat, put it in the main I76 install directory:
taskkill /f /IM explorer.exe
start /w i76.exe -glide
pause
start explorer.exe
(Optional: + link the shortcut to the .bat script instead of the .exe)
It's not perfect, but it may help.

I appreciate the detailed suggestions, Giotto.
About the old "atiumdag.dll" though... where should I get a copy of this old version? And do I put it in the directory with the main exe file or the one above that?
I may give this a try when I have some time. Again, thanks for the reply.

http://www.doshaus.com/files/atiumdag.dll
More info in thread linked above.

Hey Tossy64,
The link above is the one you need to get the Catalyst 9.5 version of the .dll file.
You need to put the atiumdag.dll in the main install directory where the i76.exe is also located.
Good luck.

When I choose Direct3D9, dgVoodoo no longer allows me to select resolution - the only option is 'set by application'
:(

The DLL file linked to, according to the file properties, says it's file version 8.14, not 9.5... is that right? And my understanding is that Catalyst 9.5 came out sometime in early 2009, and this is "Copyright 1998-2002"...
Well I tried all that and I still couldn't get the glide or d3d modes working.
Hopeless?

Yeah, maybe that .dll file has not been updated since 2002, but is still used in current Catalyst releases. Or 9.5 was the last release in which it appeared. I dont know...
For me, the list with steps above worked on a AMD Phenom Quadcore, 4 GB memory, ATI HD 4870, Windows 7 64-bit. Without the atiumdiag.dll the game would not even start in Glide mode.
I too was experiencing color palette problems, wobbly wheels, etc.
But I got Glide mode to work, and the game runs OK now.
If you are sure you've used all the steps above, then I don't know what to tell you now. I'm out of ideas. lol

Drop GOG an email. That way they'll get on it with more urgency.

Not really. We've been waiting five months now. I don't see it ever coming, or at least not for a long time.

GIotto I love you, it acutally works for me!

Just to counter the negativity, I just did a short test of Glide and had no problems.

Despite Giotto's workaround, I still cannot get I76 to launch. It'll run under software mode fine without any extra help, but the sound is incredibly buggy. Using the -glide or -d3d tag do no good; each time I'll get a message saying "Failed to initialize hardware acceleration."
My specs are:
Windows 7 64-bit
ATI HD 5770
4 GB RAM
AMD Phenom II X4 B55
At this point I'm putting my blame on ATI. Before I got the ATI card I had an Nvidia that worked okay with the game. Now I can't get it to even load.