I know this thread is old and nobody probably reads it anymore but none of the solutions here work for me.
I can launch the game fine and play it, the only problem i have is that the game is locked at 15 fps i guess this is what other people here call mouse lag even though it's not just the mouse lagging.
Going to 16 bit color mode doesn't seem to do anything, going windowed makes the game not work at all. That DirectDraw workaround or whatever doesn't work either, i get the black screen and then nothing happens i waited 2 minutes and then closed it, i tried couple times no difference.
Probably some latest drivers from Nvidia have f*cked everything for good, the game doesn't want to work.
EDIT: Tried the registry method as well and didn't work, still stuck at 15 fps.
EDIT2: Actually i just wrote the path wrong, now it works somewhat. The game is still at 40 fps only for some reason but that's already way more playable than 15 fps.