Sorry, I don’t have an answer for that specific issue. But there is a fan-made patch out for GK1 that solves many (if not all) of the issues this game has with XP. You probably won’t be able to use your saves once you apply it, but if you can’t find a way around this bug that doesn’t matter so much. 🙂 Anyway, here’s the link if you’re interested: http://www.gabrielknight2k.tk/
The one you want is the Gabriel Knight XP installer.