Just as a heads up to those of you on Vista/Win7 (Usually 64-Bit but there have been issues elsewhere..) I-War 2 can suffer from Graphical tearing and glitches that make the game nigh-unplayable on modern systems.
Unfortunately, it seems as though a fix was not found for the GoG release,. (Although the support tip of disabling SLI/Crossfire may help you, you're out of luck if you're running only one GFX card.)
You can find out more information about the problem here: http://www.ataricommunity.com/forums/showthread.php?t=689801
I was hoping it would be fixed, but as it's not, a few people may end up with a $6 bookend on their game shelf. Feel free to update this if a working fix is found, as I know I'll add whatever information I can find as it comes.
Current Possible Fixes:
Turn down Shader Settings in the graphical options. Some have had luck on anything lower than 'High', some have to go as low as 'Low.' Combine this with disabling 'Starfield Quality' may fix your problem.
Turn off Hardware T&L Lighting.
Both of the above buy me about 5 minutes of playtime before the glitches return, your milage may vary.
Some have reported turning off V-sync as well as Multi-textures on top of doing the above, while others suggest playing at a lower resolution helps.
Others still are perfectly fine on similar systems to those having troubles.

Thanks, but it's already too late for me. :(
GOG.com team, why do you claim this release to be Vista compatible?

Hmm, besides some very minor texture flickering on Lucrecia's base (hardly notice it unless I pay specific attention to it), the game is working perfectly fine for me when it comes to the graphics.
This is on Vista 64-bit with a Radeon 5850 (also worked fine with the 3870 I had before that) with whatever catalyst version I've had installed when I've tried the game (currently 10.6).
Might be useful to post some system specs and driver versions and whatnot, see if there's some common ground between the people with issues, or whatever is different between people with issues and those without.

Initial Attempt To Run IWAR2
----
Intel Core i5 740 @ 2.67GHz
4GB RAM
GeForce GTX 465 (Driver Version: 257.15)
Windows 7 x64
Other Notable Applications:
Steam (Downloading Content, along with Steam Friends)
Firefox
Settings:
Maximum (Compressed Textures Unchecked)
1680x1050
Results: Massive tearing and screen blinking. Crashed when starting a new game, or using Instant Action.
------------------------
SECOND ATTEMPT
Compatability Flags
---> loader.exe (ADMIN, VISUAL THEMES, DESKTOP COMPOSITION)
---> edgeofchaos.exe (ADMIN, VISUAL THEMES, DESKTOP COMPOSITION)
Settings:
Minimum (Compressed Textures Checked)
640x480
Results: Screen flickering gone, no tearing, still crashed with IA and new campaign.
Currently downloading a new driver (257.21).

Same thing happening here with Win 7 64 bit and a geforce 9500 gts. Donwloading latest drivers helped a wee bit although game became unplayable after 2 minuter.

I have got the game woking on my normal computr with a GTX 260 (using the latest driver) by putting the shader settings to lowest or medium, everything else put to maximum. Setting the shader settings to max causes the problems described above.
This appears to be a Nvidia related problem, as I have zero problems on my notebook (Radeon HD 4550).
Anyone got instant action working?
Edit: Never mind, after a minute my game gets screwed up again... -.-

Does that sort out the tearing that shows up too? It's pretty bad even on the main menu.

The suggestions there worked for me. Bumped it down to 16 bit and then back up to 1920x1080 32bit and it ran flawlessly.
Does the shader have to stay down? Not sure I can even tell a difference though.

I haven't got home from work to try this fix (Running Vista 64 with two HD4890's) but to be honest, I don't consider "The game should work without problems now, so long as you switch resolutions to 16-bit and 32-bit every time you launch it." to be a valid fix. The whole point of GOG is to get these games running properly on up to date systems, I-War was updated and works perfectly, why the bodge job with I-War 2???

Signed.
And anyway, the fix doesn't work for me at all with any shader setting (lowest, medium, highest). And what about the instant crashing when loading Instant Action?

Tried as suggested, it didn't work out, unfortunately. Still crashing on IA, and massive tearing/crashing everywhere else. New drivers didn't help.

One of the developers posted on here a few days ago that the issues with EOC are due to the game not liking new versions of Direct X. I don't think updating drivers will make any difference.
"It's because it was designed for an earlier version of DirectX, which isn't fully supported on the latest cards.
It's possible to write a new graphics DLL for it to support DX9 or even DX10/11, but in order to do that you'd need access to the source code and graphics API calls. Now that's not actually impossible because I know for a fact the source code still exists, but if GOG did have the rights to release the game they might not have rights to the source code, as those rights are held by the original IP owner and are different from the game distribution rights."

I wtote that and yes, that's essentially correct, but I imagine that since the problem is mostly with nvidia cards that there could be some driver issues too.
I tried the game last night, installing it off disc (don't yet have the GoG version) and I'm getting bits of the cockpit missing as well as other graphical glitches. I've got an 8800GTS 512 and I'm running Windows 7.

I've got the same problem with a Radeon HD 4890, tried in on one of my old machines running a Radeon 8900 and had the same problem.
I think GOG should bung you a load of cash Steven and get you to fix the problem, and while you're at it we'll have that never released graphics upgrade I know you've got kicking around your HD somewhere :P