I played it using a Geforce 2 TI video card at full acceleration. I had my sound card set to next to next to no acceleration because the sound card I had at the time wasn't fully compatible with DirectX.
Anyway, you might try those acceleration settings - full for video card and next to lowest for sound card.
Another thing is that I didn't have the latest DirectX or video card drivers. I had DirectX 7a and (I think) version 38.82 of the video card drivers from December 2002. So the next thing to try would be a different version of the video card drivers. If you already have the latest ones and they aren't working, you might try other drivers from the NVidia website. If you're not using the latest drivers, you might try those first.
Latest drivers for Win 98 here http://www.nvidia.com/view.asp?IO=win9x_44.03
Older drivers are here http://www.nvidia.com/view.asp?IO=win9x_archive
The drivers I used (30.82) say they are "WHQL Certified" which is why I used them.
By the way, you said
Im running windows ME with directx 8 display is compaq MV740 on NVIDIA Geforce 2 MX
Compaq MV740 seems to be your monitor.
Geforce 2 MX would be your video card.