Don't know if anyone still reads this topic, but I found it with google, I trust that anyone with this problem will do the same, so I post my solution to this problem.
WinXP professional edition, mm7 and the newest patch.
Put your desktop to 16bit colors.
Install with extra graphs.
Once install is complete, it will as to register, click cancel (this is the trick for my puter, if I do the reg, the game won't run).
Check that no compatibility modes are active on mm7.exe or the mm7setup.exe
Run the setup, choose no 3d sound and no 3d graphs, then click run.
I played the game through a week ago, then unisntalled, yesterday decided to go for another run and installed. To my surprise, it didn't work! I started thinking what I changed or did different this time. So I finally tracked the reason to that registration, at least in my case.
Hopes this helps someone.
