Hi, stan - welcome to the fray!
Don't know if I can help, but here goes.
Here are the steps that worked for me, in the correct order. Have you:
1. Performed a "full installation" of the game onto your hard drive.
2. Patched the game to the latest version (version "1.00.42c") using the correct patch - there are three different versions of the patch depending on if your game is version "1.00.42", "1.00.42a" or "1.00.42b" to begin with- see
http://www.starshiptitanic.com/game/patches.html
(your version number is shown at the bottom of the splash screen when you run the game, or may be on your game disc)
It's advisable to install the patch BEFORE modifying any other files, as patching afterwards might revert them to the "broken" versions.
3. Problems with the animations are possibly connected with the Cinepak codec ICCVID.DLL - the updated version included with Windows since XP Service pack 2 doesn't work with the game and you have to download the original version 1.10.0.11 (dated 06/11/1995) from the manufacturer's website and save (or copy/paste) it into your Starship Titanic folder (in C:\Program Files...) Here's the link to the file (the dll is inside the zip file
ftp://ftp.probo.com/pub/cinepak/cvid32.zip
4. You also need to download a newer version of the "Smartheap Library DLL" SH33W32.DLL and save that into your Starship Titanic folder as well, overwriting or renaming the original version. This step enables the game to start under Windows 7 - as you are getting the game running at all I suspect you have done this already, but just in case you haven't, it can be found here:
ftp://ftp.mackichan.com/download/sh33w32.dll
5. Finally, locate "st.exe" in the S.T. folder (or just "st" if your system is hiding file extensions), right-click it, choose "Properties" and on the "Compatibility" tab, tick "Run this program in compatibility mode for Windows Vista" and "Run this program as an administrator". (again, it appears you have done this.)
I have attached a screenshot of my S.T. directory - if you are still having difficulties, try sending a screenshot of yours using "Advanced Reply" rather than "Quick Reply" (I didn't know about that either, Bwill - thanks Zwolf for the info on attaching files!). (The "snipping tool" in Windows 7 is great for this.) You will notice I renamed my original SH33W32.DLL by adding .old, but you can ignore this.
I hope this helps you to discover a missed step - assuming you have missed one, of course! My guess is it's probably something to do with patching the game or adding ICCVID.DLL to the folder.
Good luck
Johnny