I think it was a permissions issue, because my diablo 2 copy folder is on my 2nd drive, and windows has 2nd drives set to administrator access only by default. I just changed permissions to allow all for usergroup Users and annihilus actually updated, which would explain the error "Unable to identify version" when trying to connect.
I still can't get any indicators to show up that i'm actually in glide(FPS in the top left, captured mouse in windowed mode still doesn't work) but the video does look a lot better.