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Here is the faq for Dungeon Siege in the MS support base.
It contains quite a few fixes. I can't get past the freeze
at the intro (black screen with white dots in bottom left
corner) and the resolution hasn't helped. Good luck.

http://search.support.microsoft.com/kb/psssearch.asp?
FR=0&DU=C&SPR=&LPR=&D=kbdungeonsiege&LQ=dungeon+and+siege&VA
=&T=B&KT=BOOLEAN&T1=&S=F&A=T&sh=0&SG=&PSL=&LNG=ENG&VR=http:/
/support.microsoft.com/support&CAT=Support&VRL=ENG&CND=1&SA=
GN&H=Articles+About+Microsoft+Dungeon+Siege