Probably.
Get a cheap TV card, put it in a PCI slot.
Connect the AGA output to the TV card in ( composite will do fine )
Install TV software.
Set NOCHAIN=1 on Picasso96.
Start game.
Voila, settlers in a window. If its pure AGA ( not system friendly ) you might not be able to maintain the workbench, check first to see if it can be launched from workbench ( before you buy any TV cards or whatnot ).
Theres no flicker in the TV window.
Dave.