You may have tried messing around with compatibility settings. This obviously doesnt work.
The problem lies within bad palette handling and windows aero. This fix basically removes the start bar and stuff while playing so windows aero doesnt mess up the colors. Don't worry, everything will be perfectly fine after you close the game.
(this fix is for fallout 1. I dont know the .exe for fallout 2 so i didnt include it)
Make a .bat file in notepad and paste this into it:
taskkill /F /IM Explorer.exe
falloutw.exe
Start explorer.exe
Save the .bat file into the directory where falloutw.exe is located. Crete a shortcut if you don't want to repeatedl go to program files every time you want to play.
Basically it disables windows explorer while playing so the palette doesn't get screwed up. Windows explorer starts back up when you quit the game.
You only have to click on the .bat file and you're good to go!
This also works with any other games with color problems. Just replace the "falloutw.exe" with the .exe of you choice, and put it in the said game's category.
BTW, i am using windows 7. I'm not sure if this works in vista, etc. but if it doesn't, just create you own .bat that kills windows explorer.
Optionally, you can kill windows explorer through the task manager.
If the mods dont ban me for posting this exact thing in two other threads, please sticky this highly useful fix.