This is most likely a compatibility conflict with the video driver.
Borland tests its products against generic S3 drivers provided
by Microsoft or S3 Inc. Any drivers compliant with this standard
should be okay. Video drivers that do not fully comply with this
standard may or may not function correctly with Delphi.
To verify that you have a video driver issue try changing the
hardware acceleration in the display properties to 'None'. To do
this go to Control Panel/Display/Settings/Advanced Properties/Performance (a setting of ? may work also). Restart the
computer and try opening Delphi.
If the problem is gone then you know it is a video driver issue.
If the system still freezes:
In Windows 95 try starting in safe mode.
In Windows 98, in the SYSTEM.INI file under the [display] section,
add the line 'BusThrottle = 1' (no quotes). Save the file, reboot
and try running Delphi again.
Here are some more permanent solutions:
1. Install the Delphi 4 service pack 3. This offers a work-around
by changing the way the component palette icon image list is
loaded at startup.
2. Start Delphi with the "/ns" switch: At the Run command line
type "delphi32.exe "/ns. Make sure the ?ns is outside the
quotes (It may be necessary to type the entire path to the
delphi32.exe file inside the quotes).
3. Install a new video driver.