You can also try this:
1. Change the Direct Draw/Direct3d thing
2. Update your Video Card drivers
3. Update/Reinstall Direct X
4. Try another game like UT or something and see if it works. If it don't then its a Windows or Hardware problem and thats another long list of troubleshooting steps. If it works then you are SOL with D2. Go play another game.

Let us know what happens.