Just my two cents. Had the same issue. Set it to Win 95 compat, run it in 480 res, and restarted my computer. I'm halfway to Panizo, now. No prologue skipping needed. I haven't played with the settings too much since, since what works, works, but I doubt I need the compatibility change.
Back when I was but a wee lad (well, 15 or 16, maybe), I had issues running it on XP, learning what to avoid doing to not crash the game, and saving very, very often, but then got to a point where what I HAD to do crashed it on a constant basis. I started fiddling with the settings, and learned that to stop the crashes, I had to set it to 480 resolution, and to get rid of the purple nights and caves, I had to run it in 256 colors. Well, GOG fixed the color issue already, so it was a simple matter of tweaking the other settings to get it to run right. Besides, it crashes on start-up when I try to run it on 256 colors.