hmm.. i agree with marty but here are 4 other things that could be happening
1. I doubt you have any mods installed, but if you do, uninstall them
2. Check your computers color setting, it should be around 32 bit or 16 bit and a windows 98 might have its color setting on 256
3. Your video card may not be up to date. You dont need a good video card, only a halfay decent one, but you might have a really old one that isnt compatable with IWD II
4. You can try reinstalling IWD II (although you probaly have already). When i was playing, targos was jittery all the time, i reinstalled the game and it was fine.
you can try finding out if black isle or interplay has an email address that you can get in touch with or possibly a help line. I tried best i could, i hope i could be of some help