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It worked. Thanks again.

Fast replies, cool. Anyway, I'm lost at the third step (if not at the beginning): do I run cmd (in which I can't figure out how to run the setup) or does it have something to do with 2.72 engine (in which I can't figure out how to run [load up, right?] the game, even after renaming game.exe). Some serious business here for a noob like me.

Hello, fresh meat here. Long story short:
Recently found AGS games, played through at least dozen of them, but some games have this peculiar error. Let’s take Earwig is ANGRY!, for example. Just after clicking on the game icon, a pop-up comes up:

There was a problem initializing graphics mode 320x200.
(Problem: ‘Can not set video mode’)
Try to correct the problem, or seek help from AGS homepage.

Setup is unresponsive. Any ideas on what the problem could be?

Thanks.