This Fix corrects the problems in Diablo displaying colours incorrectly.
1. Install the game. (if already installed please backup your saved games, uninstall the game, delete the files remaining in the folder that was installed and install the game again)
2. Download the update 1.09 from Blizzard Support.
3. Once downloaded run the update as administrator. (remember that the game disc must be in the drive)
4. Download this file DiabloFIX.zip.
5. Extract and copy the file to the game folder.
6. Edit your game shortcut
In Start Menu: Go to All Programs>Diablo> right-click in the game icon and go to properties, replace the .exe for .bat at the end of the target path
7. Make sure that the game is not setting to run in compatibility mode or disabling settings.