Long story short, I've got two units of Toshiba 5205, one with Geforce 460go and another one with Geforce FX 5600Go. The first one produces an abnormal amount of glitches in DOS games under Windows 98, FX one runs most of my stuff perfectly, but still few titles struggle to show some parts. I assume these parts have something common and fixing one will fix other games too.

Sea Legends (1995), shows FMV intro, no issues, then main menu, no issues, but sea sequence are messed up, also later FMV sequences are messed up:

System Shock (CD), intro video is okay, gameplay is okay, but the main menu is crippled:

Must mention two things:
1. Games that can work in DOS windowed mode runs without glitches, for eg. SShock main menu:

But Sea Legends can't run in window mode, so it's not a solution.
2. All these games run without any issues in native DOS mode, but since the laptop has only an AC97 soundcard I don't have sound there and it's not a solution.

As I understand, video mode changing in Windows works somehow differently from native DOS, and when games have different video modes for different parts this breaks the game.

Toshiba Satellite 5205-S705

1	
2Processor: Mobile Intel Pentium 4M, 2400 MHz (24 x 100)
3GPU: nVIDIA GeForce FX Go5600
4Chipset:Intel Brookdale i845MP
5Storage: HTS541080G9AT00  (80 GB, 5400 RPM, Ultra-ATA/100)
6Drive: MATSHITA UJDA740 DVD/CDRW (DVD:8x, CD:24x/10x/24x DVD-ROM/CD-RW)
7Wireless: Atheros AR5005G Wireless Network Adapter
8Ethernet: Intel(R) PRO/100 VE Network Connection
9RAM: 2x Samsung M4 70L3224DT0-CB0    256 MB PC2100 DDR SDRAM  (2.5-3-3-6 @ 133 MHz)  (2.0-2-2-5 @ 100 MHz)
10Audio: Yamaha F753 @ Intel 82801CAM ICH3-M - AC'97 Audio Controller
11Connectivity: 3 x USB 2.0; 1x FireWire; VGA; Modem; Ethernet; PCMCIA; SDCARD