Weclock: I may be way off here, but there might have been an issue with your installation, perhaps a corrupted file, try maybe re-downloading and reinstalling, maybe as a last resort.
do you use any mods, fanpatches?
otherwise, I would recommend you aren't running any memory intensive programs in the background.
I can't think of anything else at this point, this wouldn't be a driver issue, because you are actually able to play just fine for a bit. If it was a driver issue I would think it wouldn't work at all.
Otherwise, your other windows show up in the fallout 2 colors because the program itself is not responding. So it isn't being told that the program is no longer having the focus of windows, for windows to return to a normal video mode. this does sound like a sort of memory error..
check and make sure you don't have anything like ati-tray tools or nvidia tools open, or make sure you're not overclocking your hardware in any way. make sure your internet browsers are closed (i usually like to run 4-5 different webpages in a single web browser, usually resulting in it taking up somehwere around 100k memory), make sure the program has administrative rights.. and that's all I can think of for now.
I closed all apps and the one that was running in the back ground and it works now.
