The error I get is "Switch from current encoding to specified encoding not supported." It happens while loading the file "xml/text/Civ4GameTextInfos.xml". Hitting OK to the message window (and all the related errors) will let me get into the game, but with very odd text.
But I did find a work around. - at least for me.
By enabling the logging, I was able to see that 2 xml files were loading successfully, so I checked to see what the difference was. Those two files (GlobalDefines.xml and GlobalDefinesAlt.xml) did NOT specify the encoding.
So I went into all the affected files and removed the ISO-8859-1 encoding, and voila, they loaded successfully.
Again, go into each of the affected files with WordPad and change the
<?xml version="1.0" encoding="ISO-8859-1"?>
To:
<?xml version="1.0"?>
For me, the affected files were all of the ones in c:/Civilization4/Assets/xml/Text