Sorry, This is a case of not reading through the other topics.

Answering my own question:

Remove Compatibility mode from the Desktop Launcher.
In Game open settings menu and click on defaults.

Profit



After years of wanting to relive this game's experience I found out GOG supported it.
Bought, Installed and it runs fine, except that it is not detecting my Xbox 360 cabled controller.
When I run in windows 98 compatibility I am able to press one button, but the other ones are not recognized.
The controller is detected on the Menus that show up when I open the old Rogue Squadron Launcher (628KB executable named ROGUE in the installation folder).

Does any one know a workaround they can point me to in order to make the Xbox controller work? I understand others have been successful and for some users it just works but unfortunately its not the case for me.

These are my specs in case its related:

Windows 10
GTX 970
i7 Cpu
16 GB Ram
Xbox 360 Cabled Controller

Installed on the standard folder C:/GOG Games/Star ...

Any info is useful, thanks!