Well do keep in mind, when the game was released, 1GHz CPUs were just being released in mid 2000. That and they were basically crap, not necessarily the CPUs themselves, but they were being severely limited by RAM technology at the time which wasn't able to keep pace with the clock speeds so cache had to be run slower than the core itself. Your CPU has more than enough raw capability, so that does indeed point towards a software incompatibility.
I don't use W8 so outside of the bog standard things like asking if you tried compatibility modes or disable desktop compositing or trying to run at a lower color depth, I can't really troubleshoot that environment. That said, if all else fails, you might consider trying a virtual machine running maybe XP or 98. VMs usually have problems when 3D acceleration is involved but since the game has a software renderer and is relatively light on resources, that could be an option.