The game runs fine but changes the screen resolution a few times during launch and it's a little bit frustrating, can I fix this?

Also can it be run in window or tabbed out of without crashing?

That's a side effect of the way Rayman 2 checks the available resolutions when using the Glide renderer. There's not much you can do about it, but you can set a forced resolution in the nGlide settings to minimise the effect.

As for Windowed rendering, you can try using DxWnd.

Maybe one day I'll write a new renderer for this game, but that will be a long way away most likely.