Quote from drag0n
Thank you a lot, SpiritusSanctus7.
For me it was enough to:
Tick "Disable desktop composition" under "Compatibility" in "Diablo.exe" properties.Leave "Screen Resolution" window open while playing D1 (didn't have to change anything there exactly as you said).
Quote from Packman
I checked all the compatibility marks, in the properties. I am on Windows 7. How do i fix the messed up rainbow colors?