HuShuo: Thanks - this worked. It's a bit... drastic, but it worked.
If you (and anybody else dealing with the flickering on Windows 8) want a less awkward method you may try this:
Create a txt file in your Tie-Fighter folder (name it any way you like) and add these three lines:
taskkill /f /im explorer.exe
call tie95.exe
start explorer.exe
Save the file and change its suffix from txt to bat. Executing this file will close explorer.exe, launch the game and automatically launch explorer.exe for you as soon as you quit the game. Saves you all the fiddling with the task manager, tabbing out of the game etc..
If the console window doesn't close automatically after explorer.exe has been restored you may want to add another line that says "exit".
To be honest I'm not a Windows 8 user, though, and cannot *guarantee* that this method works there but it really should (it certainly works up to Windows 7 - just tried it myself). Would be great if you could try it and confirm that it works.