My kids love this game so I had to figure out a fix. Existing fixes that others posted weren't working. Thanks to all the existing suggestions I found on several sites, plus four hours of trial and error, I was able to figure it out!
1. Go to the GLDirect page on SourceForge. Download gldirect5_opensource.zip.
2. Extract the contents. Go to the gldirect5\bin\release folder.
3. Copy opengl32.dll to your GameData folder.
4. Play the game!!
Tested on Windows XP x86 with a Radeon HD 3850 AGP running Catalyst 10.11 drivers...Success!!
Tested on Windows 7 x64 with a Radeon HD 4870 PCIe running Catalyst 10.11 drivers...Success!!
Enjoy!
1/2/2012 Update: I installed the 11.12 ATI drivers and the problem seems to be resolved. If you are still experiencing this issue, make sure you have the latest drivers first.