I'm having trouble playing BASS, once the game starts when I tried to click on an item to see it's description the text starts flickering on and off fast. Then I tried to go to the menu and the screen keeps on flickering fast between the game screen and menu screen. Any ideas as to why this is happening?

Try reading this thread; it may help you indirectly:
http://www.gog.com/en/forum/beneath_a_steel_sky/making_beneath_the_steel_sky_look_better_using_filters/9

I'm looking in the folder for it. I see a Lure file, but it won't let me modify it.

Have you tried using ScummVM.exe to edit graphics options for the game?

C:Program FilesGOG.comBeneath a Steel Sky
beneath.ini
Those are what you are looking for. I would recommend opening it with a high-quality (haha) text editor like Notepad++, and add in the line.