After "installing" dgVoodoo to fix the transparency issues, I experienced extreme screen tearing when looking around with the arrow keys.

Forcing vertical synchronization did slightly help, however it was still an unsatisfying result. After messing around with a lot of settings I gave up on forcing it through dgVoodoo and used the Nvidia control panel (for AMD see the corresponding counterpart) instead.

Setting vertical synchronization to 'Fast' completely eliminated stuttering for me while also keeping input lag low.

And that's it.


Unfortunately, the issue of the flickering mouse cursor in-game remains. If anyone has a fix for that, I would really appreciate it.

Worked like a charm, thanks.
The flickering seems unfixable, but have you tried setting lockvideo to MINUS one instead of one? Of some reason, it seems to fix it for some to go back to -1. Weird as heck.
The flickering is so fast it's almost static on my system, so I don't really notice it.