I GOT IT!!!!
The post from Shire was the key:
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.
The problem was the 32 bit color. Once I switched to 16 bit, it worked fine. I tested it on My second home computer running XP home, my work laptop running XP pro and my work desktop running XP pro, and all of them worked great using the above solution.
Now the only problem will be my blood-shot eyes from playing this game for 16 hours straight... :x :x :x
