Steam – Psychonauts on Windows 7 64-bit

It's actually quite likely that these games are relying on old 16-bit DLLs. A lot of early 32-bit software relied on old 16-bit DLLs for some functions, as they did the job, they weren't used in a performance critical part of the software and there was no need to look for 32-bit versions. (for example until fairly recently the install software was often 16-bit, so much so that Win7 actually detects that and silently replaces with it's own 64-bit version of the old DLL).

Have you looked at Windows 7's XP Mode? This runs an entire copy of 32-bit Windows XP within your Windows 7, letting old programs run within XP without the program knowing it's on a 64-bit Win7 machine at all, and as it's all integrated you will hardly notice that it's running in XP.

Windows 7's XP Mode: what it is, how it works, who it's for

If it is anything like the color issues that Age of Kings has with Win 7 64 bit, you could try going to the Task Manager and ending the explorer.exe task, and then going back into the game.

With Age of Kings, you could start the game, ALT-TAB back to Windows, open the task manager and end process on explorer.exe you will lose all the Windows toolbars and things when you do it, but you can then ALT-TAB back into the game and the colors should be fixed. (In Age of Kings the graphics errors made the water bright purple.)

If you leave the task manager up, once you are done with the game you can just go to run and type explorer.exe to get Windows back up again.