I have this game on Steam and it seemed fun, but the mouse acceleration which cannot be disabled essentially renders the game unplayable for me.

Does this release have an option to disable this game breaking issue?

I don't know, honestly. But I did find this in relation to the User.ini file that can be found in:
\Star Wars - Republic Commando\GameData\Save\Profile_<name>\

[Engine.PlayerInput]
ButtonHoldDelay=.1
DoubleTapThreshold=.5
bInvertLook=False
MouseSensitivity=0.5
MouseSmoothingStrength=0.3
MouseAccelThreshold=100
MouseSamplingTime=0.00795463
JoySensitivityXY=1
JoySensitivityUV=1

This has a couple of extra lines that aren't present in my own User.ini, so I don't know whether they work, but you could always try using the MouseSmoothingStrength and MouseAccelThreshold commands in your Steam version of the game to see if they work. If they do then I'd say it is just an engine setting and can be used in any version of the game, whether it be retail disc, Steam or GOG.

Thanks, that worked on my steam version. You have to make a profile first though to generate a User.ini.
Edit: Okay, well, works after you alt-tab, then the menu sensitivity is fine.
Edit 2: Or just enable vSync, you don't have to alt-tab with it on. Vsync + lower sensitivty + mouse smoothing + FSAA makes this a great deal smoother experience.