I'm not sure if you have to change the color bit depth settings in the ATI control panel and then from the display menu under personalization, but have you looked in device manager for your gpu and if there is an exclamation mark? This sounds like a driver issue. What graphics card do you have?
There is also the option of right-clicking the game in question and then under compatibility disable desktop composition by putting a check mark in the relevant box and applying the settings. Try adjusting the other settings too. Lastly, patch the game to the newest version.