I've noticed that there are a lot of people who have complained of flickering in Stronghold, and unfortunately this age old problem hasn't been resolved in the most recent patch. Some people have suggested various compatibility settings (screen scaling, Windows 7) but very little of this works.

However, I've discovered that dgVoodoo (http://dege.freeweb.hu/) does a fine job of eliminating the flickering entirely.

1. Download the latest version (at time of writing 2.54).
2. Open the ZIP file and copy the dgVoodooCpl.exe and MS folders to the Stronghold game directory.
3. Copy the three DLLs present in the MS directory (D3D8.dll, D3DImm.dll, DDraw.dll) into the game's root directory (the directory containing "Stronghold.exe").
4. Run "dgVoodooCpl.exe".
5. Click on ".\" at the top of the window to create a profile for Stronghold.
6. Make sure that "Appearance" is set to full screen.
7. Go to the "DirectX" tab and uncheck "dgVoodoo watermark". The watermark is really only useful for testing whether your game is using the dgVoodoo libraries. Also, make sure "Application controlled fullscreen/window state" is checked*.
8. Click on "Apply".

* Having dgVoodoo control windowed mode is a problem right now so it's best just to keep it like this.