Plokite_Wolf: If they had it running, they had it running, it's irrelevant if it was 10 days ago or 5 years ago if they remember the exact procedure.
Now, did you try what I posted?
I've got good news and I've got bad news... first the bad news... :)
Yes, I did try what you said, as well as every other single piece of advice I was able to find in the forums here, on Steam and elsewhere online. I carefully tried out one thing, tested it, then reverted it if it did not work. If someone's advice involved doing multiple things including things I tried previously they I repeated the test with multiple things. Unfortunately not any of them worked.
Now the good news. I found a solution on my own by pure magic, and I have been able to switch it back and forth to conclusively determine that this one change has fixed the problem. It is however incredibly bizarre. What might this oddity be you might ask? :oP
SHORT ANSWER: The problem is caused by multi-head being active.
LONG MYSTERIOUS DANGEROUS SUSPENSE-FILLED ANSWER: :oP
I have 4 displays hooked up to my computer including:
1) Dell U3011 30" @ 2560x1600 (Primary display)
2) Dell 2405FPW 24" @ 1920x1200 (Left)
3) Dell 2405FPW 24" @ 1920x1200 (Right)
4) Toshiba 65" TV @ 1024x768 (Far right)
Arranged from left to right as: 2 1 3 4
The most frequent software arrangement is configured to dual-head mode with display #1 and #3 in the above list enabled, and that is how the displays were configured while trying to run this game. Yesterday I tried out another game - GUN which I won in a giveaway and unfortunately that game came up with the audio working but a black screen and I could not get it to work at all either - but just the display.
I did some googling around for GUN and fired nothing but blanks (sorry, couldn't resist). As a last ditch test, I decided to fire up the AMD control center and disable my secondary display leaving only the primary running. I tested out GUN and magically the game's graphics worked. "Ok" I thought, "that is pretty damned odd" because I have been using multi-head setups for 3 years like this with 2 or 3 monitors running or 1-2 monitors + the TV running almost all the time and I have ran literally hundreds of games during this time and not once have I ever encountered a game that screwed up in any way while multiple monitors were simultaneously enabled in multi-head mode.
Until now.
So, I turned multi-head back on and tried GUN and it didn't work again. Turned it back to single-head, GUN works fine. Ok, "problem solved". Not a big deal, just change to single head when I want to play that game, or if I'm lazy - set up a custom ATI application settings for that game which automatically switches to single head when it is launched.
Today I saw Commandos in the list and thought "hey.... I WONDER...". So I fired it up and voila - Commandows comes up instantly no problems whatsoever in single-head mode. So I shut the game down and start it up a few more times and it works no problem each time. I shut it down and switch to dual-head mode, fire up Commandos -> "DIRECT X 5 NOT FOUND!". That error makes absolutely no sense whatsoever, and I can only imagine now that the error message is completely bogus, and that the game is crapping out due to multi-head being active and the game code not being able to handle that and going to display an error but having bad error handling which causes it to display a bogus error message possibly from some other error condition it has built in. In other words, it appears as if the game not only doesn't work properly on multi-head systems (or at least not on mine), but the error handling catches it and has a bug that displays the wrong error.
So, I go back and forth from single to multi a few times and even triple-head, testing the game each time - game works in single-head mode, game does not work if any kind of multi-head is active. It's hard to say if it may or may not encounter this problem for other people with multi-head but it happens here, and the solution is to disable multi-head temporarily when playing the game.
I hope by posting this here that it might help someone else to find a solution who try everything imaginable that they stumble upon online which doesn't happen to work for them also. My guess is that there are a number of completely separate and probably unrelated problems that the game can encounter when it is starting up, and that the error handler is simply buggy and displays the same bogus error message about DIRECTX 5 for all of them even though it probably has nothing at all to do with DirectX 5. Considering the game appears to actually use DirectX 7 anyway that's not surprising. :)
Anyhow, thanks for the suggestions. I've submitted a support solution to GOG support so they can add it to the support database for this game in case anyone else hits the problem.