deityx: I'm glad you managed to make it work. Perhaps you should mark the issue as [SOLVED] for less confusion in the future.
Lairek: Isn´t this more of a workaround? Secret project movies still do not play, and they are quite an enjoyable part of the SMAC experience...
I don't know why it doesn't work for you without directdraw=0. But, I had the same thing happen to me when I tried Windows 98 compatibility mode, and the only reason why I tried that was because I was getting game hangs because of an artillery bug.
Secret project movies have to be toggled on/off from within the game menu, once you play, go to preferences and turn them back on.
I now play on Windows 2000 compatibility mode and finally am not getting any hangs anymore (fingers crossed). BTW, I am also on Windows 7 64-bit.
Good luck!