Well, remember that you CANNOT in any way install the SW20 on a pentiumII system and expect it to work OK... it conflicts with some addresses AFAIK... I have being trying to this a LOT in the past, but problems always appearred... DOS apps/games worked fairly good (but some times the DSP got wrong signals [due to addresses conflicting] and the sound was distorted with echo and flanges....) in win98/me there is no chance of it to work...
I recommend to use the pII system, with the SLI voodoo2's, and a basic PCI or AGP card (did not made any difference for me, never found something that would not run because of AGP) and as for the sound, try and get a SoundBlaster AWE 32 or 64 (ISA) that will give you SB16 sfx, AWE/Roland LAPC/SCC1 wavetable, it will work with virtually everything
T2PC does not care about the vga, and the probs you encountered on the LCD monitor is because of the special way it interacts with it... you need a CRT monitor... Remember, t2pc had a constant EXTRA SMOOTH scrolling, even on a 386sx/20 with ISA vga... the programmers were geniouses!
btw, you can run Ultima 7/8 under windows too, someone made some replacement exe's ... http://members.iinet.net.au/~rsd/five.html