in all fairness WIndows 98 was the best for the GPx series - i still run a windows 98 box for GP3 stuff (won't quite stretch to GP4 unfortunately). As far as modern versions go, i found Vista far superior to XP for pretty much everything (i loathe XP with a passion and wish it would burn in hell)
Back OT, I've had this bug before (on vista, and 2000) and i can't remember how i fixed it - think i just reinstalled, and reinstalled graphics drivers while i was at it. Have you tried with the decrypted exe?.
GP4 does work fine on 7, it's about the same as vista performance/reliability wise (GP4 that is, 7 is a different story - loads worse for me!)
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Team Japan Owner - GPGNC