It's simple

.
Head over to the Microsoft website, and download Virtual PC 2007 for free.
Get yourself a Windows 98/98SE disc from eBay (£5-15)
Install 98 onto the Virtual PC (takes about 15min on a modern PC!)
Install GF onto the Virtual machine, and hey presto, absolutely flawless.
With the added benefits of...
Can run it in a window and switch away without sound hanging
*SHOULD* avoid problems with modern graphics cards because the Virtual PC emulates a standard 8mb graphics card
*SHOULD* avoid problems with sound because again, a standard sound card is emulated.
Works perfectly for me, feeling fairly smug right now
EDIT: I should also add that my machine is dual core, and no issues at all this way, not even with cutscenes.