Ok, I right clicked on the the tico.bat file and set the compatibility settings as follows:
compatibility: windows95
checked: run in 256 colors, run in 640x480 screen resolution and turn off advanced text
services.
This is the result of trying virtually EVERYTHING and voila, imagine my shock when it
finally worked.
Now if I could just locate the manual so I know what I'm doing. Even Google can't find
it. You'd think one of the game manual sites would have it but no. (Is this the same game
as Aegis: Guardian of the Fleet?) I can't find that manual either

EDIT to correct puncuation