I am having a strange issue - I am trying to start a new game but for some reason cannot.
At the title menu the only options I have are "restore" and "quit" - no prologue or new game.
Any help would be appreciated.

Looks like a bad install.
Or have you been fiddling around with the subtitles and/or the no-interlacing patch ?
I had a couple on buttons dissapear on me from the main menu when i messed things up while trying to get the no-interlacing patch to work...

This happened to me when I tried to get the subtitles working. I had to uninstall and reinstalled and then everything worked perfectly.
I now have the game working with subtitles and de-interlaced so the game looks glorious!

I am having the exact same issue. It only starts after copying the interlace patch over. Is there any way to fix this?

Take a look at the subtitle thread. http://www.gog.com/en/forum/gabriel_knight_series/q_does_gabriel_knight_2_the_beast_within_feature_subtitles
This release has the patch files all mixed up. The solution is in that thread.