I've had these problems for a while, too -- but I'm using an ATi Radeon 64MB DDR, so I doubt it's an NVIDIA issue. I did notice that OpenGL would work fine, but that the error would occur running in Direct 3D mode. After installing a fix which was originally intended to solve the problem of Windows XP running games at 60Hz regardless of the refresh rate set by the user, I no longer had this problem. It can be found here. Maybe it'll do the same for you guys? Otherwise, try playing the game in 16-bit, just to see if it has anything to do with that?