Syniurge: The solution described there: http://forums.steampowered.com/forums/showpost.php?p=9846953&postcount=7
is what gives me the highest framerate without glitches for my Vista laptop with ATI Radeon HD3200.
Disabling only HW Vertex Processing hit much more the performance.

Miaghstir: Are you running BGE.exe directly or through the shortcut the GOG.com installer makes for you in the start menu (and Vista Game Explorer)? The shortcut runs gogwrap.exe and through there, the game. The gogwrap program should fix some problems with the game (such as its buggyness with multi-core processors).

Raneman25: Where the hell is the gogwrap.exe version in Windows 7? Mine never shows gogwrap.exe

Syniurge: The solution described there: http://forums.steampowered.com/forums/showpost.php?p=9846953&postcount=7
is what gives me the highest framerate without glitches for my Vista laptop with ATI Radeon HD3200.
Disabling only HW Vertex Processing hit much more the performance.

ethaninja: Which also remindes me, it keeps asking me for updated drivers? I followed everyones instructions as best I could and I still cant get it to work. The wierd thing is, I just downloaded new drivers, tried it again and it keeps asking me. But it detects my graphics card.. this is confusing :/

Kaede: @Saved : you should try Miaghstir's suggested solution just in case, but afaic I think you are out of luck.
My laptop also has an 8600M GT. When I bought the game (here) I tried very hard to get the game running right but it was either glitches or a low framerate.
EDIT : wow, I didn't notice that Saved's post ... and the whole topic were *that* old, sorry.

On a more positive note, I can add that apparently, I don't have these problems with my new desktop computer (Radeon HD 5770).
The game appears to be picky only with certain GPUs or other specific setups.

pops117: Hey Saved! I just managed to get rid of any screen flickers and such.

When Antialiasing was turned on in the the Advanced Tab of the SettingsApplication, the flicker and popping was all the more visible.

First enable HW Vertex Processing again and all the other ones too (except for W buffer) in the advanced Tab. Now go to your Nvidia Control Panel then 3D Settings>Manage 3D settings. Select the "Program Settings" Tab and add an Application. Choose bge.exe. Now change "Antialiasing-Mode" to "Override any application setting", choose in "Antialiasíng-Setting" anything you want. It won't affect the AA used in game anyway, though I would take "2x" just to be sure it won't affect performance too much. Check also if "Texturefiltering-Anisotropic Optimization" is deactivated and "Texturefiltering-Negative LOD-Bias" is set to clamp.
Click "Apply". You should now have no flickering or such anymore with or without AA.

(Note: I set "Anisotropic Filtering" to 16x, but it probably doesn't affect anything. It's the AA override that fixed it for me.)

BTW: I see you're using 1680x1050 resolution. If you're annoyed by the stretch caused you can actually play the game in a 5:4 aspect ratio without that stretch. I'm able to play the game in the 1313x1050 res. Same procedure Nvidia Control Panel > Display > Manage Custom Resolution > Create > Width: 1313 Height: 1050 click Test > check if it works (Yes, No) . Your custom res should be added and you can now pick it in the SettingsApplication. ;)