Ran across this somewhere, supposedly from GTA3 "support":
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Windows XP + NVIDIA based cards (possibly other brands):
We have found a possible problem with Windows XP that manifests itself as
graphical problems both in the game menu and also during game play. We have
traced this problem to be a Windows XP dll driver problem. Technically this
problem is solved by the use of a newer version of
d3d8.dll than is shipped on CD with Windows XP. (The version on the Windows
XP CD that has
problems is 5.1.26000.0 versions tested without error include 5.1.2600.15
and 5.1.2600.29) Currently the only way we know to update this dll file is
to install the Windows XP Patch: The Computer Cannot Enter Standby or
Hibernate If a Direct3D-Based Screen Saver Is Running
(Q306676) downloadable from the following Web Site:
http://download.microsoft.com/download/whistler/Patch/Q306676/WXP/EN-...
676_WXP_SP1_x86_ENU.exe (URL may wrap!)
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The Knowledge Base article (Q306676) cited above may be reviewed at
http://support.microsoft.com .
First, however, new computers arriving with Windows XP already installed,
you may and may not have the latest graphic or sound drivers installed.
Check each manufacturer's individual web site (not the computer company's
web site) for the latest drivers. If they fix the problem you're fine, if
not you can use an XP feature of "Roll Back Driver" in Device Manager.
Also, if you're running a Creative Labs sound card, check the hardware
acceleration in Control Panel/Sounds and Audio Devices/Speaker
settings/Advanced button/Performance tab where you may decrease the
acceleration by moving the slider to the left a couple notches. Do one
thing at a time and test, until you reach a solution.
GTA3 will run straight as installed, and you do not need Compatibility Mode
for it.
--
Chris H.