make sure you have the correct amount of pagefile set. you need to set it to 1.5 times the amount of actual ram you have... so 2gigs will need a page file of 3gig and 6 gigs will need 9 gig page file...
run the game in xp mode if you can. also make sure you turn off aero via the icons properties and enable the run as admin...
if your running 64bit win 7 then you wont be able to get it to work no matter what compatibility you use.
it does however work with 32bit win 7 with some compatibility settings.