When I installed sh4 on my vista64 machine I had the same issue. I believe I fixed it by going into the nvidia control panel and setting all the options to stock - disable all AA/AF, turn off multi/supersample, turn off multi core support, etc. I ran it, changed screen resolution to what I wanted, then exited and reenabled the nvidia stuff.
Also set the SH4.exe to run as administrator.
And as DT said above, make sure to install DX9.
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