Direct3D: entering 1920x1200x32 60hz full-screen mode
Any particular reason you are running Nestopia in such an incredibly high resolution mode and color depth? It's completely unnecessary and just makes your PC work harder. The original NEs color palette and resolution can easily fit within 16-bit color and 1024x768 resolution. I typically just run mine at 1024x768x16 -- that's plenty enough resolution to display the old NES graphics and even still take advantage of nice filters such as Hqx. You might see if dropping to a lower resolution mode fixes your issue.
Just curious, how do lower the resolution of Nestopia? My system resolution is 1680x1050x32 60hz and in Nestopia in the video options I have 1024x768x16, but when I run Nestopia and then check the Nestopia.log file I see this:
Direct3D: entering 1680x1050x32 60hz window mode
Also, I was wondering if anyone had tried the XP mode for Win7 that I suggested above, I don't have Win7 so was just curious to see if it actually works.