Yes there is a fix, I had the same problem initially... Try these steps, these should help:
1.) Make sure you are running at least v 1.12 so you can use the now-legit "NO CD* fix, Running from the CD often causes a read-buffer issue in W7, and having all those files on your harddrive will result in increased performance.
2.) YOU MUST Run Diablo II in Compatibility mode for *Windows XP SP 2* (Running in SP1 or 3 will cause error messages during gameplay)
3.) Run the Shortcut as an Administrator (Running as a local user causes W7 to limit its *AUDIO* functions... because it thinks the game is trying to exclusively access your sound device) and while you're there, check the box that says *Disable desktop composition*. This will allow Diablo II's 3D effects to render correctly. It temporarily disables Windows Aero and other Visual effects until the game has been exited. These effects are not compatible with the game.
4.) Go to your Diablo 2 folder and change game.exe to the same settings (Run as admin, Compat. mode for XP SP2, disable desktop composition)
5.) The only way I was able to use the 3rd mouse button was by using the older, non-legit version of D2loader.exe (An old hack they used for the no-cd thing until Patch 1.12 came out). You can now use this *hack* online as Blizzard has removed its illegitimacy and disabled the automated Battle.net Warden from detecting this online anymore as many Vista and 7 users have to use this to use their middle mouse buttons, hehe.