Have you tried setting the game resolution to match your desktop resolution?

You'll need to manually edit Prefs.ini to do so.

Just updated to newwer betas and restart and viola seems to have worked

Debug Message: Version v1.50 Dark Avatar last updated on: Fri Feb 9 14:05:57 2007
Debug Message: Checking DX Version.
Debug Message: *********DXDiag info follows.*********
System Info
Time: 2/17/2007, 15:42:46
DirectX Version: DirectX 10
Machine Name: BIG-BAD-ASS
Operating System: Windows Vista™ Home Premium (6.0, Build 6000) (6000.vista_rtm.061101-2205)
Languages: English (Regional Setting: English)
System Manufacturer: NVIDIA
System Model: AWRDACPI
BIOS: Award Modular BIOS v6.00PG
Processor: AMD Athlon(tm) 64 X2 Dual Core Processor 4200+ (2 CPUs), ~2.2GHz
Physical Memory: 2046MB RAM
Page File: 868MB used, 3458MB available
Windows Dir: C:\Windows


Display Info
Display device 1:
Device Name: \\.\DISPLAY1
Card Name: NVIDIA GeForce 8800 GTS
Manufacturer: NVIDIA
Chip Type: GeForce 8800 GTS
DAC Type: Integrated RAMDAC
Key Device: Enum\PCI\VEN_10DE&DEV_0193&SUBSYS_042110DE&REV_A2
Display Memory: 640 MB
Current Display Mode: 1680 x 1050 (32 bit) (60Hz)
Monitor Name: SyncMaster 225BW, SyncMaster CX223BW(Digital)
Monitor Max Resolution:
Driver Name: nvd3dum.dll,nvwgf2um.dll
Driver Version: 7.15.0011.0064
Driver Date: 2/7/2007 18:13:00
DirectX Acceleration Enabled: Yes



Sound info
Sound device 1:
Description: Realtek Digital Output (Realtek High Definition Audio)
Default Sound Playback: Yes
Default Voice Playback: Yes
Hardware ID: HDAUDIO\FUNC_01&VEN_10EC&DEV_0888&SUBSYS_1458E601&REV_1000
Manufacturer ID: 1
Product ID: 100
Driver Name: RTKVHDA.sys
Provider: Realtek Semiconductor Corp.
Driver Version: 6.00.0001.5302
Driver Date: 9/27/2006 17:59:32
Type: WDM
Other Drivers:
Acceleration Level: 1
Cap Flags: 0
Min/Max Sample Rate: 0, 0

Sound device 1:
Description: Speakers (Realtek High Definition Audio)
Default Sound Playback: No
Default Voice Playback: No
Hardware ID: HDAUDIO\FUNC_01&VEN_10EC&DEV_0888&SUBSYS_1458E601&REV_1000
Manufacturer ID: 1
Product ID: 100
Driver Name: RTKVHDA.sys
Provider: Realtek Semiconductor Corp.
Driver Version: 6.00.0001.5302
Driver Date: 9/27/2006 17:59:32
Type: WDM
Other Drivers:
Acceleration Level: 1
Cap Flags: 0
Min/Max Sample Rate: 0, 0



Debug Message: *********END dxdiag info.*********
Debug Message: Entering WinMain
Debug Message: ******* Starting Game Shell *******
Debug Message: Going Fullscreen
Debug Message: Preparing to change display settings.
Debug Message: Using multilsample setting: D3DMULTISAMPLE_4_SAMPLES
Debug Message: Game Resolution: 1024 x 768
Debug Message: Running fullscreen.
Debug Message: HAL (hw vp): NVIDIA GeForce 8800 GTS
Debug Message: D3DPRESENT_INTERVAL_DEFAULT
Debug Message: Refresh rate: 60
Debug Message: Bit Depth: 32 bit.
Debug Message: *********Checking D3DDevice Caps***********************
Debug Message: A full-color cursor is supported in hardware at high resolution modes.
Debug Message: RGB in format 6:6:6, Masks reported as ff0000:ff00:ff
Debug Message: Now Fullscreen
Debug Message: Shell initialization complete
Debug Message: GalCiv2 is activated.
Debug Message: ***** Initializing Game *****
Debug Message: Timer Frequency is 0 369e99
Debug Message: Initializing sound card.
Debug Message: initailizing bink
Debug Message: No files found matching mask Movies\techs\*.bik
Debug Message: No files found matching mask C:\Users\Root\Documents\My Games\GC2DarkAvatar\Gfx\Movies\*.bik
Debug Message: Create setup screens.
Debug Message: Clear galaxy settings.
Debug Message: Clear influence.
Debug Message: Clear up laws.
Debug Message: Clear first time events.
Debug Message: Clear wonders and trade goods.
Debug Message: Clear sector mapper.
Debug Message: Set mouse.
Debug Message: Set update timer.
Debug Message: Popup Manager Update: Updating window with ID=0
Debug Message: Popup Manager Update: Unhiding FullscreenBink
Debug Message: Clear data definitions.
Debug Message: Killing ship styles:
Debug Message: No files found matching mask C:\Users\Root\Documents\My Games\GC2DarkAvatar\ships\*.xml
Debug Message: No files found matching mask C:\Users\Root\Documents\My Games\GC2DarkAvatar\shiptemplates\*.xml
Debug Message: No files found matching mask C:\Users\Root\Documents\My Games\GC2DarkAvatar\ShipStyles\*.xml
Debug Message: No files found matching mask ./Data/\FleetFormations\*.fleet
Debug Message: No files found matching mask C:\Games\Galactic CivGfx\Planets\C0*.png
Debug Message: No files found matching mask Gfx\Planets\C0*.png
Debug Message: No files found matching mask gfx/Terrain/1SideN*.png
Debug Message: No files found matching mask gfx/Terrain/1SideE*.png
Debug Message: No files found matching mask gfx/Terrain/1SideS*.png
Debug Message: No files found matching mask gfx/Terrain/1SideW*.png
Debug Message: No files found matching mask gfx/Terrain/2SideN*.png
Debug Message: No files found matching mask gfx/Terrain/2SideE*.png
Debug Message: No files found matching mask gfx/Terrain/2SideS*.png
Debug Message: No files found matching mask gfx/Terrain/2SideW*.png
Debug Message: No files found matching mask gfx/Terrain/3SideN*.png
Debug Message: No files found matching mask gfx/Terrain/3SideE*.png
Debug Message: No files found matching mask gfx/Terrain/3SideS*.png
Debug Message: No files found matching mask gfx/Terrain/3SideW*.png
Debug Message: No files found matching mask gfx/Terrain/4SideN*.png
Debug Message: No files found matching mask gfx/Terrain/4SideE*.png
Debug Message: No files found matching mask gfx/Terrain/4SideS*.png
Debug Message: No files found matching mask gfx/Terrain/4SideW*.png
Debug Message: No files found matching mask C:\Users\Root\Documents\My Games\GC2DarkAvatar\ships\*.shipcfg
Debug Message: Reading Star Names
Debug Message: Reading Star Names... Done
Debug Message: No files found matching mask ./Data/English/Tutorials/*.xml
Debug Message: Popup Manager Update: Updating window with ID=1
Debug Message: Popup Manager Update: Updating window with ID=17
Debug Message: Popup Manager Update: Unhiding OptionsWnd
Debug Message: OptionsWnd: Quit Btn
Debug Message: Posting WM_CLOSE message.
Debug Message: WM_CLOSE message received.
Debug Message: GameUninitialize start
Debug Message: Killing Galaxy
Debug Message: Killing threads.
Debug Message: Kiling civs.
Debug Message: Killing ships.
Debug Message: Killing rallypoints.
Debug Message: Killing misc objects.
Debug Message: Killing stars.
Debug Message: Killing anomalies.
Debug Message: Killing asteroid fields.
Debug Message: Killing asteroid field mining bases.
Debug Message: Killing space resources.
Debug Message: Killing colonies and planets.
Debug Message: killing scenario.
Debug Message: Clearing Turn Event Log
Debug Message: Clear galaxy settings.
Debug Message: Clear influence.
Debug Message: Clear up laws.
Debug Message: Clear first time events.
Debug Message: Clear wonders and trade goods.
Debug Message: Clear sector mapper.
Debug Message: Clear data definitions.
Debug Message: Killing ship styles:
Debug Message: Killing Galaxy: Completed
Debug Message: Shutting down sound system.
Debug Message: Clearing sound and music handles.
Debug Message: GameUninitialize end
Debug Message: Device not cleared. 1 counts left.
Debug Message: D3D not cleared. 1 counts left.
Debug Message: Destroying Window.
Debug Message: Main Shell terminating normally