Find your "monitors" control panel. You can do this by using File --> Find --->"Monitors." Open it, and select "colors" and "thousands." Alsoi, under the "screen" tab in the Basilisk II GUI, make sure you have selected 256 colors.
It probably depends what sound card you have. I have a verry old Yamaha OPL3Sax and I have no major problems with sounds. The system sounds don't work, but all applications sounds works without problem. The minor problem is that basilisk turns the sound volume to maximum, and I must decreasing it. Also, after I finish using BII, the Windows wolume remains high and i must diminish it.