I'm running a fairly modern laptop (Dell Latitude E6400) with Windows XP and this game is incredibly laggy even at the lowest detail settings. Any idea what is going on and how to fix it? I've tried looking around online but all the info seems to be more from when the game came out!

Unfortunately, we can't sticky older solutions, so quickly;

Everything in the shogo game folder should be st to win98 compatibility with text service off and visual themes disabled.
If you can run the game smoothly in software mode then it's a video problem, more than likely in your case as xp should be able to run shogo without compatibility mode.

From the shogo launcher hit the advanced button.
Type the following: maxfps-55 You can try 70, 35 or some other number, whatever's smoothest. Tick "always specify these command line parameters".