I tried and I tried again to make it work. Now there are a lot of posts on RAGE3d about this, but honestly the game wasn't made for Win2k which it says right on the box, and it's more headache than its worth in my opinion.
To solve the problem, check my signiture, I dual boot Win2k and Win98se. It just makes things so much easier, and the neat thing about having a 98se partition that you really don't care about (I just use mine for stuborn games like NFS5) is you can test programs you might not wanna mess with on your serious configuration (win2k).