I generally install BUG into CustomAssets, and install VD as a Mod. If you are doing that - I'd:
backup the "BUG Mod.ini",
delete CustomAssets (or rename CustomAssetsBAK)
make a new directory CustomAssets
reinstall BUG into CustomAssets
copy your backed up "BUG Mod.ini" over the newly installed "BUG Mod.ini"
and then install VD 6.1 (I believe its at now) as a MOD.
in your CivilizationIV.ini, change the "Mod =" line to:
Mod = Mods\Varietas Delectat
Also I believe BAT includes a Flags.FPK that you may want to just copy over into VD's Mod directory.
There may also be a way to install VD into customAssets, but I didn't muss about with that. This way seemed the best route for myself.
EDIT: Also EmperorFool has noted in the main BUG thread, another option to install BUG (as a Mod), and then just copy its contents into the Varietas Delecat directory, thus winding up with VD+BUG when you load VD.