Sounds like a bug to me there.
Make sure that your game install folder isnt write protected (right click for properties in WindowsExplorer) - especially the video8.cfg file.
I just checked my video8.cfg (you can open it with editor, its basically a text file) file and noticed that my gamma is set to 1.00 as well (i cant recall it being at that, but then i havent looked at it in a long time, so i might just have forgotten to adjust it after last reinstall).
If you feel like messing around, you can try to change the number for gamma in the cfg file itself - but i only recommend doing that when you have a backup of your settings somewhere!
