Ok, I still don't understand fully but it sounds like what I am after is the 32bit BGRA screenmode?
I went in to P96Mode and changed the TrueColour depth from TrueColour to TrueColour & Alpha (what I presume is the A in BGRA?). Rebooted and the "Voodoo: 1024x768 32bit BGRA" screenmode had appeared. Selected this screenmode and tested it, it displayed fine. Saved the screenmode and rebooted for good measure.
The backdrop does seem to load a bit more quickly (I have also made some other changes like converting to IFF etc), but large icons like Exoticons still take a long time to load. Would scaling them down make any difference?