I found out Quake 3 Arena does not run properly. I get the error: GLW_StartOpenGL() - could not load OpenGL subsystem. I am using a ATI Radeon 1950 pro video card and the default Windows 7 driver.
****UPDATE****
After some research the Windows 7 ATI driver is an old driver dating back to 2006. There is a beta driver, which includes beta Catalyst software, released for ATI video cards. I downloaded it and I also downloaded just the driver (Catalyst software not included) for Vista. I have installed the driver for Vista and all seems to be working fine, but I'm holding on to the beta just in case.
Quake 3 Arena does work now.