its because of win7
Edit the following file in Notepad. Be careful not to save it as ddraw.ini.txt... notepad may try to add the .txt extension for you !!! select All Files from the dropdown list when saving to avoid this.
DDRAW.INI
Look for the section in the file as follows:
;XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
[Graphics]
;Set to 0 for 8 bit fullscreen
;Set to 4 for dx9 fullscreen
;Set to 5 for dx9 windowed
;dx9 modes cause some corruption of movies
;A dx9 mode is required for any graphics related script extender functions to work (i.e. fullscreen shaders)
;Modes 1, 2 and 3 are no longer supported
Mode=0
Now, change "Mode=" to "Mode-4".
Save the file and start the game normally.