Found some info regarding ATI video card compatibility problems with Rogue Squadron at LucasArts support site, sounds like your problem. Hope this helps:
"Problems When Using An ATI 3-D Card Which Uses The 3D Rage Pro Or 3D Rage LT Pro Chipset
If you are encountering a black screen lock-up, or if you are being kicked back to the desktop while attempting to start Rogue Squadron 3D, and you are using a 3-D card manufactured by ATI Technologies (such as the ATI XPert@work or ATI XPert@play), the problem is most likely related to the version of the driver you are using with the card.
Rogue Squadron 3D was tested with, and fully supports the earlier 5.0 version of the driver for the 3D Rage Pro chipset. Unfortunately, Rogue Squadron 3D is not compatible with the latest version of the drivers released from ATI. We have been in contact with ATI, and they are aware of the problem. To correct this problem, we recommend you install an older version of the driver. This driver (ver 2548) is available on ATI's website at:"
Ties are flies, swat'em!