I'm not sure if Windows 98 is even capable of handling 32-bit color.
Have you tried reducing it to 24 bit or possibly 16 bit? How about 256 colors, does that work?
Have you tried lowering the screen resolution? Maybe you're monitor can't handle 32bit at whatever high resolution you've set it at.
Try to see if it works correctly at a lower setting such as (800x600x16 bit) first, then work you're way up. I find that 1024x768x16 bit is optimum for Windows Me (assuming you're computer is in the 866 MHz - 1 GHz range, like mine is; and about 256 - 512 Mb RAM). Any higher resolution and the icons and text is too small and it hurts my eyes. Also, it's noticeably slower when increasing to True Color (24 Bit, millions of colors).
It's not like you'll actually see a difference beyond High Color (16 bit) anyway - which is roughly 65,000 colors... whereas 15 bit is 32,000, 8 bit is 256 colors, and so on. Trust me, 16 bit is "beyond adequate" for any Windows 98 purposes. And you have it set at twice that! Kinda extreme if you ask me. Not even your 1 GHz computer will be able to handle that many colors without putting some drag on the cpu. And no, I don't mean 16 colors (that would be 4 bit.)
It's Windows 98 for crying out loud.
Oh, and another thing. Before you go experimenting with updates from MDGX, it's good to make sure that everything is in 100% working order before you tamper with your system by installing that stuff. Because then you won't know if it was mdgx's "upgrades" that caused the problem or not. I'd be very cautious about fiddling with those things. Just my opinion. If you had system restore on Windows 98, which you don't unfortunately, I'd definitely try rolling back my system to how it was before the MDGX "upgrade." Just sayin'.
To elaborate on my point concerning 32 bit on Windows 98, consider the following quote from wikipedia:
"Many modern desktop systems (Mac OS X, GNOME, KDE, Windows XP/Vista/7, etc.) offer a 32-bit color option (given a suitably modern video card), but in that context, 32-bit color refers to 24-bit TrueColor with 8 bits for an alpha channel. When switching to an 8/16/24-bit color option in those systems, generally transparency/translucency effects are disabled, and the only reduction in color depth is seen when going to 8/16-bit color. "
"While some high-end graphics workstation systems and the accessories marketed toward use with such systems, as from SGI, have always used more than 8 bits per channel, such as 12 or 16 (36-bit or 48-bit color), such color depths have only worked their way into the general market more recently."
^ quoted from the article entitled "Color Depth"
Therefore, I think it's totally safe to assume that 32 bit color on Windows 98 is complete overkill. However, I may be wrong. It's always good to get a second opinion so maybe somebody can offer different advice. I don't know.
Okay, I've thought about it some more, and it definitely sounds like the problem is your monitor. If it goes black like that when switching settings, then obviously you're pushing it beyond it's limits. Assuming Windows 98, like I explained, can even handle 32 bit.
This post has been edited by ScrewUpgrading: 05 November 2011 - 07:51 AM