Well, I am surprised of no replies to this thread since I know of a few others that had this problem...
My first suggestion would be do try first running AH in 16 bit mode, no Z-buffering or anything 'toggled', try 800X600 first. If you still get the red screen death at this setting, then we can eliminate your video card from the scenario as a possible culprit.
Another suggestion would be to search for DX8 in this forum, read the threads. I'm still running DX7.0a.