Not really sure without knowing more.
Have you tried enabling 3D acceleration in the options menu? Or disabling it, if it's already enabled. That's the only setting you can really modify that's likely to have any effect.
It's also possible although unlikely that your CD has been damaged. The easy way to test this is to try and copy the contents of your Grim Fandango CD to your hard drive; if it throws up a CRC error while copying, you can be sure the files on it have somehow become corrupted and you'll need to obtain a replacement for that file.
Weirdly, I had this problem years ago when I started the second disc, although the sound stuttered rather than froze. The weird part is that about a year ago it fixed itself, and the file was no longer corrupt.