There's some important details to installing ArcadeVGA so it works right.
IIRC, you need to remove any Nvidia display drivers (or is it ATI? can't recall) from the PC before attempting to install the ArcadeVGA. I ran into this and downloaded the driver cleanup tool, and everything worked great.
Anyway, take a closer look at the install directions on the CD. I'm at work right now so I can't look it up, but you should have little trouble getting this working with the instructions that Andy provides.
