By 16-color default, I take it to mean 16bit color. If you are asking how do you go in and change this to 32bit color, right click on the desktop, Choose properties, and click on the tab Settings. There is a pulldown that should allow you to choose 32bit.
 
Having said that (and probably you've done that) since this is a Dell, they usually have their own "tweaked" video drivers on their webpage. They used to permit you to go in and download at will. Now, you have to establish an account with them.
 
If you want to take the chance here are three drivers that are supposed to be W2K compatible:
 
http://www2.driverguide.com/uploads/uploads9/7314.html
http://www2.driverguide.com/uploads/uploads9/7310.html
http://www2.driverguide.com/uploads/uploads9/15400.html
 
and this page: http://www.voodoofiles.com/3202

Your right! I already tried to change display properties, but even though they show as the "new" settings, they do not actually take effect.
I have already tried "downloading" drivers, but to no avail! But I will try the ones you forwarded. I will do this tonight, and advise of my results. Thanks again!

There is a good reason why you can't get 32 bit,Voodoo 3 3000 can't do 32 bit colour even though there is the option of choosing it.Oh just read your post again have you put in the driver for your monitor?