First of all, system specs, and I did run a search and read other people's Q&A threads for this issue!
Asus Eee T101MT -something or other
Intel Atom CPU N450 running at 1.66GHz 1.67 GHz (I'm not the most experienced computer guy around - why the heck do I have two different processing speeds listed?)
Windows 7
1.00G Ram (which I"m going to upgrade as soon as I figure out how)
32-bit OS (apparently matters, not sure why)
Max Screen Resolution is 1024x600, and it seems to have trouble running things in full screen mode at 800x600, not sure why, but it just squishes them oddly instead of putting black bars on either side.
Right, here's my problem: I installed DD, ran the configtool, set the screen resolution for 1024x600, and ran the game (as an administrator). The menu filled my entire screen and more - I couldn't click 'next' at character creation because it wasn't visible. It was clearly running at the default 1024x768 resolution. I tried setting it for 800x600, and it squished everything, running 800x600 but filling my entire 1024x600 screen - at least I could start a game, but everything was as ugly as heck. I re-ran the config tool as an administrator, set it again to 1024x600, and same problem. I then tried to run at 800x600, and it ran full screen but tiny - obviously not 800x600, possibly a smaller resolution. I browsed the forums here and tried opening my config file with notepad and changing the settings, but even running as an administrator it would not let me save an altered file.
I'm not particularly computer savvy, so I've really run out of options here - I'd very much like to play, I bought this GOG copy to go WITH my CD copy, so I could play on my new netbook. Can anyone help? Perhaps tell me what I'm doing wrong? Or is this a Windows 7 issue? (I did try running compatible for Windows XP).

To change the settings of the config file try moving it to the desktop, edit it there, save it, and then put in back in the game folder.

When you installed the game, did you right click the setup.exe and click "Run as an administrator" in the resulting dialog?

No...it did ask my permission but I didn't grant it preemptively.
Thanks - I tried that, and no luck. Still running the wrong resolution.

That may be your problem as Win 7 / Vista may block a full install if it is not done as an admin.
I suggest you uninstall the game and delete any directories that may remain under [ Install location ] \ GOG.com \ Divine Divinity and do the following.
I suggest turning UAC off when you install and . . . especially on Win 7 . . . install in a directory outside of Program Files. I create a directory named "Games" on the C drive. After creating the directory, right click the setup.exe and click "Run as an administrator" on the resulting dialog. On the first dialog of the GOG installer, click the Options button on the lower left corner and direct the install to the Games directory.
After the install you need to also right click the game shortcut, click Properties on the resulting dialog, click the Compatibility tab and check "Run this program as an administrator".
(Turn UAC off by going to Control Panel, User Accounts, Turn User Account Control on or off. Set UAC to "Never Notify" in Win 7. See attached image. Turn back on after your game install. )
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Edit: On the game shortcut, I uncheck "Run in compatibility mode for" at first only trying the modes, starting with the newest OS and working backwards to older OS's, after I have tested game play without a compatibility mode.
Some games seem to run better on Win 7 without a compatibility mode being used. If not using a compatibility mode doesn't work, select a mode, try the game play . . . repeat until you find the newest compatibility mode that works.
Do check "Run this program as an administrator" after install.

Nothing you posted there worked, I'm afraid - did a clean install and everything. I've got a question though - the ONLY two resolutions my monitor supports are 1024x600 and 800x600, but my COMPUTER squishes it when the game is 800x600 - it's not a game thing, it's something about my netbook. I think it's hardwired to ONLY accept those two resolutions and to squish 800x600 anyway, it can't do the black boxes along the side of my screen. I tested the Gothic 1 demo and it runs fine, but I think 1024x600 is a native resolution for that game. It looks to me that the game is running in 1024x768 on menu's.
If I attach the external monitor I have, will that allow me to play games in other resolutions? I"d have to go dig the monitor out to see, and I don't want to mess anything up (also, I wanted a portable game, which that would no longer be, heh).

Sorry that didn't help . . . it does sound like a hardware problem. If you installed in a directory outside of Program Files try to edit the config.div and see if it will keep your setting now.
I would try to use and external monitor just to confirm that it is a display problem specific to your video card / monitor.
I would open a help ticket with GOG support as well . . . also look at your video card setting for other options ie check Use 32 bit color etc. (Right click the desktop, click Personalize, click display and the card tab)
Edit: Check for any video card driver updates that may be available . . . =)
Looking on the Asus forum it seems they have some problems with the video driver. It is a touch screen?? Can you disable the touch screen temporarily?

It is a touch screen - I didn't know they had problems with the video drivers - bleah. Let me see if I can disable it, I think there was actually a button for that...
Well...heh...the manual did list a button for turning off the touch screen. However, what they meant is, you turn off THE WHOLE SCREEN. Unfortunately, that didn't help.
And yes, I got the computer about a week and a half ago and fully updated everything.

Well, I go out on a limb and say the touch screen video driver may interfere with the game graphics. I don't know that, just guessing since your problem seems unique.
Have you tried other games? You might try a help ticket at GOG and Asus especially since it is so new . . . I am out of suggestions but other community members may weigh in later in the day.
Hope you will post a solution if you find one . . . =)

Thank you! I'll do some more digging - and see if more suggestions come up. And I'll certainly post if I DO figure it out; I know this game is popular for netbook gamers, and I think it has to do with the drivers for screen resolution rather than the game itself, but I'll see what I can find out. Thank you for all your help!

It is a great game, played thru it 3 times, hope you get it running as it is loads of fun if you like RPGs . . . . =)