Sadly this has been reported before under Win98 and ATI rage cardas.
I would try upgrading your DirectX version mind you it is at version 8.1 now.
For the big download. DX7 is pretty old mind you now and an install may help. (It should at least improve you performance of other graphicial stuff).
No new drivers seem to be available for this card last update: Posted May 28, 1999 (v4.11.2560) Nearly 3 years old now Eek!!Thought you said 'My comp is not all that old and is set to 32bit.'
Gonna need a bigger boat!
Old 3D cards are a little falky with MD. And to be honest I cannot see it being fixed. If you can afford to upgrade a cheap new-ish (in the last year or two) will work fine. A basic Ge-force 2 will be more than OK. And are very cheap really. The old one I bought for about 90 UK pounds a year ago now cost about 25. It will be worth it.
Sorry to be the bearer of bad news.