Well, apparently all I needed to do is disable windowed mode and select default draw and nothing else, and it works straight off the bat. In windowed mode it whines about 16 bit stuff.
The problem now is that everything is sluggish in terms of scrolling while in game for example, and also, I cant access any other menus other than the first one, because nothing is shown otherwise.
I can go back by hitting esc, and can click on new campaign and hit a blind enter and then it goes into the game.
But other than that I cant do anything other than play in really slow motion and am not able to save or anything. Even hitting space while in the game freezes the game.
Ive tried that windows 7 second screen thing, it doesn't help at all.