Try installing DirectX, Windows 7 doesn't come with certain older .dll's which I-War 2 needs.

http://www.microsoft.com/en-us/download/details.aspx?id=35

Already done that, it didn't help.

From the log file, it seems to be the DX7 Sound that stops working and stops it from loading, as shown:

"DX7GRAPH: [unknown] Setting gamma to 1
DX7GRAPH: [unknown] ******** Device initialised OK
DX7SOUND: [unknown] ******** fcSoundDeviceDA initialising...
DX7SOUND: [unknown] Failed to initialise COM (Unknown error code)
FLUX: [unknown] Cannot initialise sound device
DX7GRAPH: [unknown] **** Terminating fcGraphicsDeviceD3D...
DX7GRAPH: [unknown] Cleaning up D3D COM objects...
DX7GRAPH: [unknown] D3D cleanup complete
DX7GRAPH: [unknown] Cleaning up DirectDraw buffers...
DX7GRAPH: [unknown] DirectDraw buffer cleanup complete...
DX7GRAPH: [unknown] Attempting to restore original display mode...
DX7GRAPH: [unknown] Mode restored OK
DX7GRAPH: [unknown] Cleaning up DirectDraw COM object...
DX7GRAPH: [unknown] DirectDraw cleanup complete
DX7GRAPH: [unknown] **** Device terminated OK
DX7GRAPH: [unknown] **** Unbinding device from window
DXINPUT: [unknown] **** Terminating fcInputDeviceDI...
DXINPUT: [unknown] **** Device terminated OK
FLUX: [unknown] Destroying application
FLUX: [unknown] Application destroyed
LOADER: [unknown] Leaving WinMain with return value 0"

Not sure how to resolve this though.

Can you select a different soundprovider?

For example on my PC I can choose between the motherboard soundchip and HDMI from the graphic card (and USB headphone as well if I connect it), rightclick on the speaker icon and select playback devices to see them.

Tried that, no difference, the same error comes up in the log, even using my USB headphones.

Support have said they can't help, as they don't support Windows 7 for I-War 2 :(

You could uninstall and then reinstall the game, on my system I-War 2 wouldn't run after I updated my videodrivers but reinstalling solved it for me (I'm running Windows 7 64 bit by the way).

There's another thread with some instructions on how to fix startup issues:

http://www.gog.com/forum/independence_war_series/iwar2_eoc_quick_install_guide

On Windows 7 x64 I was only getting a black screen and a yellow cursor at first, but after applying step 3 (Disable Data Execution Prevention for loader.exe), the game ran. It actually runs without needing any of the Windows compatibility options - I could disable all of these for loader.exe.

I tried all the fixes and this game will not start on my windows 7 x64, I just get:

"Loader.exe has stopped working"

The compatiblity options and flux.ini modification in the help forums does not fix this.

EDIT: What fixed it for me is to use the DgVoodoo2 wrapper.

Slight bump but people need to be warned.

Installing this on anything other than Windows XP is a freaking nightmare. I've given up, what a waste of money. The game simply is unlaunchable on my windows 7 64 bit system. No amount of ini fixes, or DEP exceptions or voodoo wrappers change the fact that the game launches to a black screen with a yellow cursor.

If you have a newer system I would recommend you avoid this game. GOG did nothing to get it running on newer systems. :)

Off to see what kind of refund I can get. Might as well put this useless joystick back in the closet.


*EDIT*

Well. Hours later I have figured it out. This game REALLY hates DEP. I mean with a burning passion. Despite adding every .exe, loader and whatever else i could find to the DEP exceptions. I STILL could not launch the game...

....until I disabled DEP itself entirely. Upon a restart it started with no issues. I am the dumb. Hopefully this helps someone, as the exceptions apparently wont work if you choose Loader.exe, EdgeofChaos.exe, and whatever goglauncher is called. Anyhow hope this helps!

Yeah, the game can be really weird. Some people with recent NVidia cards are sometimes not able to start IW2 at all, no matter what they are doing.
I never had complaints about AMD cards on the forums, though. No clue why or how or...whatever.

I just want to say, that it doesn't matter which edition of Windows you have. On my system it just works out of the box without any problems. And I have an Intel GPU and Windows 7 64bit Edition. Certain combinations of hardware are just more likely to not work.

Edge of Chaos was running fine for me but today i tired to run it and it never loads, no error message, it just never loads.
I did install new Nvidia drivers recently so will see if that is the issue by reinstalling the game.

I have a digital download of Two Worlds II and the installer gives me the same issue. Just never loads. I got that from D2D and not gog.com though.