Something weird is going on with the mouse when im in fallout 1. Whenever I go to move my character the mouse keeps flashing on and off. Also, whenever my character moves it is a little buggy where he will stop and move really quickly looking like it has a low frame rate. I am running windows xp if that helps at all. Thanks in advance!
Edit: I also forgot to mention that the lettering on the main screen for new game load game etc looks as though it has been squished together.

This may have something to do with your video card drivers, do you have any special setup? like ati tray tools or some sort of Nvidia control panel? if so try exiting them before playing. Also, give the resolution patch a shot, it's pretty helpful in most cases. Other than that, try maybe freeing up some ram by closing other programs.