I'm having a similar or the exact same problem.
I have the latest directx, I have the latest drivers for my RADEON 9500 pro.
I use the icon to launch the game get the 1st splash screen (the loading notice one) when the 2nd splash screen comes up I get a "check XML" text message with a progress bar that gets to about 1/3 full then the splash window closes and the window process stops running.
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System Information
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Time of this report: 10/26/2005, 20:55:52
Machine name: REMOVED
Operating System: Windows XP Home Edition (5.1, Build 2600) Service Pack 2 (2600.xpsp_sp2_gdr.050301-1519)
Language: English (Regional Setting: English)
System Manufacturer: Dell Computer Corporation
System Model: Dimension 8250
BIOS: Default System BIOS
Processor: Intel(R) Pentium(R) 4 CPU 2.80GHz
Memory: 1022MB RAM
Page File: 235MB used, 2226MB available
Windows Dir: C:\WINDOWS
DirectX Version: DirectX 9.0c (4.09.0000.0904)
DX Setup Parameters: Not found
DxDiag Version: 5.03.2600.2180 32bit Unicode
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Display Devices
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Card name: RADEON 9500 PRO / 9700
Manufacturer: ATI Technologies Inc.
Chip type: RADEON 9500 PRO / 9700 AGP (0x4E45)
DAC type: Internal DAC(400MHz)
Device Key: Enum\PCI\VEN_1002&DEV_4E45&SUBSYS_30021002&REV_00
Display Memory: 128.0 MB
Current Mode: 1152 x 864 (32 bit) (70Hz)
Monitor: Dell D1025HTX
Monitor Max Res: 1280,1024
Driver Name: ati2dvag.dll
Driver Version: 6.14.0010.6575 (English)
DDI Version: 9 (or higher)