Hi,
as one of the few remaining users of Windows '98 (Hey, I'm just going to upgrade directly to Vista) I know this isn't probably high on your priority list, but anyway...
The 1.1 version of Galciv 2 worked just fine (after a certain activation issue with OS detection had been solved - Thanks, Galciv-IRC!). Anyway, when 1.2 came over I couldn't start the game. I thought "Shucks" and went to do other things (was busy at the time).
Anyway, in the last week I came back to the game and installed 1.3 final beta (number 3, I think). Still gave out the same error message. I decided to wait for final version, just in case.
Lo and behold, final version (1.3) works ok.
However, at 1.3A something has been broken again.
With 1.2-1.3 beta3 this happens BOTH with GC2launch and galciv2.exe. With 1.3 no problems. With 1.3A I cannot start GC2LAUNCH.exe, but I can get to the game by just running galciv2.exe directly and it works perfectly.
The error message that happens is: "The GC2LAUNCH.EXE file is linked to missing export SHELL32.DLL:SHGetFolderPathW." and another dialog box with "F:\Galciv2\GC2Launch.exe A device attached to the system is not functioning".
I'd say this is merely a change in the build environment that you used - linking against a newer version of SHELL32.DLL that isn't available on Win'98 or something...
However, now that I have the game working again (with 1.3), please try not to break it again