Other than that, you shouldn't get any more support here. You've failed to name your OS, hardware config and DOSBox version/config. Any attempt on helping you without having that info is a complete waste of time.

"I am playing it on a laptop with a core 2 duo T5870 running @ 2.0 GHz with a Geforce 8400m GS video card."
"...on Vista"
quite a lot of info about dosbox.conf options he tried was there too

by the way also try all possible types of output=
is your desktop set to 32-bit colour? (cause i see your pictures are 24 bits per pixel). Make both screenshots again with ctrl-f5 and don't convert them from .png.
does it happen in a window and in fullscreen?

Okay, I tried all possible options for "output=" ,it didn't remove the graphics corruption.

My desktop is set to 32-bit color.
I can't recapture one of the screenshots because I didn't save at that part, but the one I reuploaded shows the most undesirable visual effects.

http://tinypic.com/view.php?pic=ev6nnn&s=6

And yes, it happens in both window and full-screen mode.

quite a lot of info about dosbox.conf options he tried was there too

Bah, middle of the thread doesn't count! <cough> (;