Have similar problem with a Simplified Chinese Win7 (even though I use English as display language). It seems to be a fairly comman coding problem, and applocal doesn't help for this particular situation.
You can go to "Control Panel", then "Region and language", then "Administrative", and change the "Language for non-Unicode program" to English. Then you should be able to play with no problem.
However, you may need to change it back to whatever it was after your game session since you programs in Chinese might not work well under such setting. And every time you change this setting, you need to restart your computer. Annoying, isn't it?
Hope GOG can actually fix it up.
PS: This is for WIN7, I don't have a WINXP operation system at hand right now.
Post edited September 07, 2012 by PandaLiang