You need to disable frame buffer effects and soft shadows. You do not need to disable v-sync. And every other setting works fine.
What you may still get even with those two settings disabled is that when you start a game just after character creation, the intro video will start, but it will be blacked out. It may seem quiet at first because there's no music when the "A long time ago, in a galaxy far far way" would be on screen. So it may appear as if the game is doing nothing. But if you be patient and wait, you'll eventually hear the intro music but have a black screen. In this situation, just alt-tab out and then click the game icon on your taskbar to bring the game back to full screen. The video will be fixed and will automatically restart the video from the beginning. There are only 2 videos in the game that have this issue and that's the first video in the game, just after character creation, and one video on Manaan just after you make an important choice. It's something to do with the way the game transitions from a game menu straight into a video, that's causing the issue. But all other videos that transition into video from gameplay level work fine.
I highly recommend you read the following post which will help you fix just about all issues with this game and even help you mod the game to work better with better graphical fidelity on modern OS's
https://www.gog.com/forum/star_wars_knights_of_the_old_republic_series/widescreen/post111 Hope this helps.