Has anyone been able to get it to run in windowed mode in Windows 7? When I switch to it, the window is the proper resolution but the graphics are 1/4 the size it should be and has messed up colours.
Thanks in advance.

When you install on Vista / Win 7, make sure you right-click the setup.exe and click "Run as administrator" from the resulting dialog. If you just double-click the setup.exe both OS's tend to block some disk writes and the game may not fully install.
I don't know if this will work for Caesar III but . . .=)
Try right-clicking the game shortcut, click Properties, click the Compatibility tab and check mark "Run in 640 x 480 screen resolution" This may fix the size problem for you. Also, on the Compatibility tab, check mark "Run this program as an administrator"
Right click the desktop, click Personalize, click Display Settings, next to the Resolution slider is a drop down box, select Medium (16 bit) (see attached image, may differ from Win 7 ), press Apply and try playing the game. Set back to 32 bit when you are done.
Run in full screen mode if possible.
Edit: Setting the colors in the second step may be all you need to do . . .=)

I too have this problem.
here is a pic what mine looks like in windowed mode.
Windows 7

Win 7 does not like running older games in windowed mode . . . =) . . . it should run fine in full screen. Also, try making the setting above for the windowed mode. I would try running it full screen for the fewest problems.
By the way, the game card indicates that Windows 7 is not supported.

Where does it say Windows 7 is not supported. It says its compatible with XP/Vista doesnt mean it not with 7.

My bad, what I should have said is that it does not say it is compatible with Windows 7.
Check this thread for more info . . .=)

See this post for update info.
Uninstall the old version completely and delete any directories the uninstall leaves before reinstalling.
When you install on Vista / Win 7, make sure you right-click the setup.exe and click "Run as administrator" from the resulting dialog. If you just double-click the setup.exe both OS's tend to block some disk writes and the game may not fully install.

Edit: I am an idiot.

Change your desktop color to 16-bit when using windowed mode.
In Win7 x64 you must use either Nvidia's or Ati's control panel since Win7 doesn't have this option.

Actually, when you open up the "Screen resolution" option from right clicking on the desktop, you can click "advanced settings." This opens up what would look familiar in WinXP. Then click the button for "all modes." 16 bit High Color is listed there. I do this whenever I'm running Caesar 3. Cleared up the weird graphical glitching nicely for me. :)

Ah they hid the option to lower color depth in advanced option, good to know. :) Thanks.

Sorry for stupid question, but how do you switch to windowed mode in game?
I tried alt+enter but it remains full screen.

Thanks.

EDIT: nothing im also stupid, is possible to do ingame lol

reducing to 16bit color did the trick for me! now I can play windowed 1024x768 mode

The garbled colors is an issue for a lot of games in Windows 7. Luckily there are a number of
fixes around.
The culprit seems to be the fancy Aero 3D graphics that are standard for Windows 7. I do not have Windows 7 and have only used it at work occasionally (my agency is int he process of switching over )but from what I have read a lot of people are using a non 3D version of the windows interface that comes with Windows 7 because the fancy version causes problems.

well I turned off all fancy stuff first thing after starting windows 7 :) nevertheless, I nned to reduce to 16bit. doesn't hurt much :)