Well I think I found a solution although there are still some tweaks to do.
Referring to another thread regarding a graphic issue on AoE:II, a user posted this information: 1) Open the task manager up (right-click on taskbar, and start task manager)
2) Disable "explorer.exe" (yes this will make everything disappear but you can get it back from starting "explorer.exe" again)
3) Start the game by using the task manager (File, New Task (Run))
This combined with setting the compatibility tab to Win95 and set 640x480 as well as lowering the color depth to 16bits seems to make it work.
There are still some issues though but I think I'm on something:
You can tell the graphics are a tiny bit off.....not by much but its still a little bit noticable. If it would be just that, I could deal with it. Its not enough to take off your enjoyment of the game.
The game sometimes will crash when you are changing your labor distribution from Farms to Industrial or Research....why that is I don't know.
I think though that both issues are related so perhaps some extra compatibility parameters might help. Anyways, as I need to head off soon, I'll try them either tonight or early tomorrow morning.
If anyone cares to put more imput into this please do