Sorry for my third post in row, but it turned out that Mok created 1.3d patch for Balls of Steel, which fixed speed problems on Vista 64-bit. It worked for me on Win7 64-bit, however graphics is still garbled.
But there are 2 workarounds for this:
1. kill explorer.exe process in task manager
2. right click on your desktop and choose 'Screen resolution' option, don't do anything just keep that window open and launch the game
Now the game runs perfectly on my computer
is a link to 1.3d patch.
NOTE: ddraw fix posted HERE
didn't work with this game.