I have not read all the posts but I did want to point out that whenever you buy a game more than 5 years old over steam, you should read the forums for this game first to find out any possible problems.
Steam does not seem to play-test games they put on their service at all, which is a downright shame ( quality is abandoned for more money. Typical ). But someone will always buy, find out its crap and share their thoughts on the forums.
Like 3 years ago, I bought Jagged Alliance 2 Gold on Steam. The game came with a game-breaking glitch. Basically, you had infinite money.
A ton of buyers complained, both at Valves forums and the Publisher's forum. It was quite ridiculous. Steam said "we have asked them for a patch but not got anything" whereas the publisher said "oh, we sent them the patch a few month ago!", and both sides refusing to get together and work it out. Until about half a year ago.
So bottom line.. if its a older game, always check forums.
And be glad that there are some people like GoG who take pride in what they do and are always out to do quality releases instead of quick dirty cash-ins.

Actually it can be either. There's also clear and readily available return policies for the various types of hardware they carry, although they will also deviate from those policies on occasion in favor of the customer. And this is all from personal experience.
Which will still likely get them the "Fine, I won't buy anything from you in the future" response. There are multiple ways stores can tell customers asking for a refund to sod off, but in pretty much all cases it results in the store being a roadblock to the customer getting what they want, which isn't particularly good for retaining customers. Now, if what a customer wants is unreasonable then the store probably doesn't care too much about retaining that person as a customer. However, broad "no refund" policies end up driving away many reasonable customers as well. The store saves a bit of money by not giving a refund on one game, and at the same time loses out on several additional sales by driving away a customer.
Yep, and that would be an example of a less reasonable request. The store would still lose a customer, but a customer they wouldn't be particularly concerned about losing. Running a business means dealing with people who have a wide variety of wants, and in such situations it's necessary to take a carefully nuanced approach. Give in to everyone's wants and you'll be hemorrhaging money dealing with a handful of whiny troublemakers; deny everyone's wants and you'll be hemorrhaging customers who otherwise would have bought much more from you in the future.
Thus the necessity for a nuanced approach. Have policies clearly covering the most common reasons for requested refunds, but also the ability to deal with cases on a case by case basis. Consider the general demographic of one's customers along with the characteristics of the products being sold when crafting the overall policies, but also consider the particular customer and product for each case (someone who's bought 20 games from you in the past and is asking for a refund for the first time is probably worth more consideration than someone who bought only one game and now wants to return it). Unfortunately many businesses these days regard customer service as no more than a cost center, and thus end up losing customers as a result.

The problem is, a lot of stores have customers who have been there longer than the employees. I don't know how it is where you live, but around here we have a pretty high turnover rate for retail, at least at this level (items with potential for commission have a lot less turnover). So while it is all fine and good to give your 20-year customer special privileges, how the hell are the employees going to know that? :p
The things that work great for a small store don't work for the large chains. Steam is a large chain, as far as that is concerned.
As such, it is much easier to just do blanket policies.
And you suggest handling case-by-case approaches. Okay, that is great. But what constitutes a refund? Someone might buy a 4x game and have no idea what is going on, and want a refund. They might even say "this game doesn't work", because they have no freaking idea what to do (I feel similar things when playing Armageddon Empires :p). But someone might have bought the CD-version of THe Bard's Tale and realized it doesn't support Vista. Same statement.
So we need strict criteria. And do you honestly see people being happy about filling out a form (likely a complex one) when trying to return a game?
It is a losing battle, plain and simple. Support your small stores, they can do this stuff. But the chains can't, and they really have no reason to do so for something that turns as small a per-item profit as a video game. They lose a customer? Well, first off, they probably didn't (EVERYONE claims they are boycotting stores, then come back next week :p). And even if they did, so what? Most people aren't going to have any problems, or at least won't demand a refund over a bug.

I like GOG better than Steam, but I still love Steam.
Benefits of GOG:
1. No DRM! :D
2. Always under $10 and still regular sales.
3. Bonuses- soundtracks, wallpapers, etc.
4. Pre-set to run on a modern system- All the DOS-box work is done for me.
5. Generally good community.
Benefits of Steam:
1. Large library spanning multiple gaming generations
2. Built in 'community' online features
3. Automatic updates
4. Easy access to info about games- pics, video, link metacritic reviews
5. Great client for organizing games.
6. Awesome sales that routinely happen.

Fully agree with the exception of Steam 4 and 5. Finding info on games is annoying, to say the least, and the organizational capabilities are weak. Still better than GoG for the latter, but just need to complain about those :p

You seem to have mistaken my example of one thing that might be taken into account when considering a refund with the totality of things that should be considered. Hopefully that misconception is now corrected.
Of course it's easier. That says nothing of the policy's effect on business.
That's where something called "judgment" comes into play. It's easy to come up with all sorts of excuses as to why you supposedly can't do something, as your posts routinely demonstrate. There will always be various problems, things that are tricky to get right, mistakes that will be made, judgments that will turn out to be wrong. So what? What needs to be considered is not whether a new system will be perfect or capable of dealing properly with every situation that comes along, but whether it will be better than the system currently in place. People have an amazing ability to talk themselves into inaction by considering everything that could go wrong with a new plan of action, while ignoring all the things that are wrong with the current plan of action.
If a store does the actual analysis and determines that a blanket "no refunds" policy and the number of lost customers it results in will cost them less than taking a nuanced policy then I really can't argue with that choice. Of course the question is always whether that is actually the case, or if it's just laziness and avoidance of personal responsibility winning over what's actually the better business strategy. And beyond all of that there's still the simple reality of the situation. If customers don't like the way a store does business some of them will stop buying from the store (even if many just whine but then keep on buying). It doesn't matter what kind of justifications there are for why the store has to do business a certain way, if the customer doesn't like it and thus decides to take their business elsewhere then that's that (which is basically what this thread was about to begin with). Statements of "it's not their fault" or "this is the best they can do" become completely meaningless within this context.

I just spent ~15 minutes with AvP Classic 2000 and it seems to be running fine. Maybe it doesn't like your computer. What are you running?
My system: A64x2 4200 - Radeon 4770 - WinXP

Yes, AvP 2000 works just fine for me too on a Vista 64 machine. I actually was thinking this was one case where they did a pretty good job of releasing an older game- they even plan to modernize and update the multiplayer. LucasArts and Sierra games on the other hand....

Oy.
For the first point: Apologies, but I can only counter the arguments you present, not the ones you don't.
For the second: Do you have a solution to that problem? If the entire policy is "play it by ear", you become dependent upon people with minimal training who will probably go get a new job in a few weeks. If you want to train them, then you need to make sure they learn what counts as return-worthy and what doesn't. Which brings us to: what counts as return-worthy?
I never argue that something needs to be fool-proof to be enacted. I merely argue that it must be practical and not introduce more problems than it solves. In this case, it potentially solves the problem of disgruntled customers (well, very specific classes of disgruntled customers), but introduces problems in enacting this to solve the problems for those very specific classes of disgruntled customers.
As for the third: Fully agree that it is up to the store/business. But why must we assume that the economically competent stores that have been in business for decades are mad and just throwing pointless edicts down from a mountain? Maybe, just maybe, they already did these evaluations.
Will some customers be lost? Yup. But some customers are going to be lost no matter what. You can NEVER have 100% approval rates. If we managed to develop some incredibly perfect system that will make every single person content with the results (even if they can't get their refund), you still are going to annoy the people who don't want to go through that process. Maybe they'll just get annoyed because it doesn't work (sort of like the topic creator, who seems to feel it is Steam's responsibility to write patches :p).
See, this is where that little something called "judgement" comes into play. It's easy to come up with all sorts of excuses as to why you supposedly should do something, as your posts routinely demonstrate. There will always be various disgruntled people who can benefit from new systems. So what? What needs to be considered is not whether a new system will increase the approval ratings of certain demographics, but instead whether the new system will have a noticeable impact on the big picture, and if said impact is worth the hassle. People have an amazing ability to talk themselves into action by considering everything that could go right with a new plan of action, while ignoring all the things that can go wrong with the future plan of action (and all the things that are right with the current plan of action).
You see what I did there? :p

Well, this discussion seems to be degenerating again into simply going in circles being contrary, so I'll be stepping out before it gets boring or annoying. I've spoken of what I consider to be viable solutions in my earlier posts, and the solutions that various retailers have implemented may or may not be optimal for the individual businesses, although trying to speculate endlessly about each individual business with limited information available isn't something I consider a particular worthwhile exercise. There also remains the simple reality of the situation I spoke of earlier, which is what remains central to this thread, as while customers have pretty much no control over how businesses are run they have complete control over who they themselves decide to do business with.

Is it just me or is this thread going to the dogs? Oh wait, it wasn't good in the first place.

That's because they know they can get away with it 99% of the time. Pretty much all the gaming media loves them so they can simply brush any complaints under the carpet.
One day, I would really love to see someone instigate legal action to challenge a lot of things Valve currently get away with. Too bad it'll probably never happen.

I would love to see that too. Steam and Valve has given me nothing but automated responses to all my technical inquiries and the like, EA at least gave me 1 letter that was made specifically for me and my situation (BF2142 account issues with NS expansion, talked to a real person once out of ten messages!) and I am really beginning not to like them at all.

Isn't it possible to get sued for selling defective products and not removing them at lest in retail markets? I always thought it was possible.

It's possible to get sued for just about anything. Whether the suit will actually be successful depends on everything from the merits of the case, to the lawyers and judges involved, to the alignment of the stars and planets... which is to say that speculating about the potential for a lawsuit to succeed, particularly if you aren't trained as a lawyer, is typically a pretty pointless exercise.