ok, i just did this yesterday on my windows 2000 pc.
first off, there is no way to stop the flashing. but you can make it flash only once and you can make the window automatically come to the foreground. i like to keep the task bar hidden and just hate that not only does the window icon flash, but the task bar is made visible and is locked. so i set the flashing to 1, and made it so the window comes to the foreground. now my taskbar doesn't lock. it is annoying that the active window i'm working on gets pushed to the background, but it is not as annoying as the taskbar locking and the flashing.
here's how to do it. bring up the registry and find the following key:
[HKEY_CURRENT_USER\Control Panel\Desktop]
under desktop, find ForegroundFlashCount and ForegroundLockTimeout. the first one, as the name suggests, controls the number of times the window icon will flash. the default is 3. i set it to 1. the second one is the time windows waits before bringing the application to the foreground. the default value is 200000 msec. i set it to 0. set those two values to whatever you like and reboot.
so now the window icon flashes once and the window is brought to the foreground. the task bar doesn't lock either.