Hehey! My first post, though I've been reading for a while. Hello
Check this out:
http://think-games.blogspot.com/2010...windows-7.html
The problem is the Windows 7 DWM (Desktop Window Manager). In previous versions of Windows there was a single screen buffer that all programs had access to.
In 7 (and Vista as well I believe), each program has its own separate buffer. That's why you get the desktop, or a grab of mobo, or whatever you were doing right before you launched your favourite sub sim.
The "disable desktop composition" option forces the game to use the main screen buffer rather than its own. The only downside of this is that you lose flip 3D (Winkey-tab) whenever the game's running. In my opinion, it's a worthwhile sacrifice.
So, to summarise:
Right-click on the SH4.exe and select "properties".
Under "compatibility" put a check mark next to "Disable desktop composition"
Go sink some ships!