I know it's an old thread but there was no response so here we go!
1 Install the game (note the drive letter you used to install)
2 Instal the 1.2 patch (if you can find it)
note: there is a patch for nVidia cards and another for all other cards try to use the right one.
3 Insert disc 1 (but don't start the game)
4 In the start menu select RUN and enter "regedit" without the quotes. Hit enter.
5 On the lefthand side open Software, Square Soft Inc, Final Fantasy VIII and finally click on the 1.00. (HKEY_LOCAL_MACHINE/SOFTWARE/SQUARESOFT INC/FINALFANTASY VIII/1.00)
6 On the righthand side RIGHT click on Data Drive and select MODIFY .
7 Enter the letter of the drive you installed the game from followed by colon, backslash. (eg. d:\) and hit OK.
8 Close everything and start the game.
This is an easy fix but may have to be repeated each time you play.
Hope this helps
Regards
S