I found the debug.err file on my desktop instead of the folder you specified. It looks like the game couldn't find any of the data files, and on closer inspection, the shortcut it generated was pointing to the wrong folder. I fixed this, and so far things seem to be running. It looks like this was a clerical kind of bug (first the broken launcher, now the misdirected files).
For the record, here's the debug file:
Debug Message: Version beta 2b last updated on: Fri Dec 22 12:15:30 2006
Debug Message: Checking DX Version.
Debug Message: *********DXDiag info follows.*********
System Info
Time: 12/25/2006, 15:43:11
DirectX Version: DirectX 9.0c (4.09.0000.0904)
Machine Name: SIMON
Operating System: Windows XP Home Edition (5.1, Build 2600) Service Pack 2 (2600.xpsp_sp2_gdr.050301-1519)
Languages: English (Regional Setting: English)
System Manufacturer: Acer, inc.
System Model: Aspire 5000
BIOS: Phoenix NoteBIOS 4.0 Release 6.0
Processor: AMD Turion(tm) 64 Mobile Technology ML-32, MMX, 3DNow, ~1.8GHz
Physical Memory: 958MB RAM
Page File: 282MB used, 2032MB available
Windows Dir: C:\WINDOWS
Display Info
Display device 1:
Device Name: \\.\DISPLAY1
Card Name: SiS M760GX
Manufacturer: SiS
Chip Type: SiS 760
DAC Type: Internal
Key Device: Enum\PCI\VEN_1039&DEV_6330&SUBSYS_00831025&REV_00
Display Memory: 64.0 MB
Current Display Mode: 1280 x 800 (32 bit) (60Hz)
Monitor Name: Plug and Play Monitor
Monitor Max Resolution: 1600,1200
Driver Name: SiSGRV.dll
Driver Version: 6.14.0010.3750
Driver Date: 6/29/2006 10:26:08
DirectX Acceleration Enabled: Yes
Sound info
Sound device 1:
Description: Realtek AC97 Audio
Default Sound Playback: Yes
Default Voice Playback: Yes
Hardware ID: PCI\VEN_1039&DEV_7012&SUBSYS_00831025&REV_A0
Manufacturer ID: 1
Product ID: 100
Driver Name: ALCXWDM.SYS
Provider: Realtek Semiconductor Corp.
Driver Version: 5.10.0000.5790
Driver Date: 2/24/2005 14:20:22
Type: WDM
Other Drivers:
Acceleration Level: 3
Cap Flags: 0
Min/Max Sample Rate: 0, 0
Debug Message: *********END dxdiag info.*********
Debug Message: Entering WinMain
Debug Message: ******* Starting Game Shell *******
Debug Message: Preparing to change display settings.
Debug Message: Multisample Type chosen in prefs not supported. Disabling multisampling.
Debug Message: Using multilsample setting: D3DMULTISAMPLE_NONE
Debug Message: Game Resolution: 1280 x 800
Debug Message: Running in windowed mode.
Debug Message: HAL (sw vp): SiS M760GX
Debug Message: D3DPRESENT_INTERVAL_IMMEDIATE
Debug Message: Refresh rate: 0
Debug Message: Bit Depth: 32 bit.
Debug Message: *********Checking D3DDevice Caps***********************
Debug Message: A full-color cursor is supported in hardware at high and low resolution modes.
Debug Message: Border size reported as 6 by 32
Debug Message: RGB in format 6:6:6, Masks reported as ff0000:ff00:ff
Debug Message: Now windowed.
Debug Message: Shell initialization complete
Debug Message: GalCiv2 is activated.
Debug Message: ***** Initializing Game *****
Debug Message: No string tables in ./Data/English/ToolTips.tips
Debug Message: Timer Frequency is 0 369e99
Debug Message: No string tables in ./Data/English/*.str
Debug Message: Initializing sound card.
Debug Message: initailizing bink
Debug Message: No files found matching mask Movies\*.bik
Debug Message: No files found matching mask Movies\techs\*.bik
Debug Message: No files found matching mask Gfx\Tutorials\*.bik
Debug Message: No files found matching mask Gfx\*.png
Debug Message: No files found matching mask Gfx\Race\*.png
Debug Message: No files found matching mask C:\Documents and Settings\Simon de Vet\My Documents\My Games\GC2DarkAvatar\Gfx\Movies\*.bik
Debug Message: No files found matching mask Screens\*.dxpack
Debug Message: No files found matching mask Music\*.mp3
Debug Message: No files found matching mask Event Music\*.mp3
Debug Message: No files found matching mask Sfx\*.wav
Debug Message: Create setup screens.
Debug Message: Error. String Not Found. Table: GalaxySetup String Name: bc
Debug Message: Clear galaxy settings.
Debug Message: Clear influence.
Debug Message: Clear up laws.
Debug Message: Clear first time events.
Debug Message: Clear wonders and trade goods.
Debug Message: Clear sector mapper.
Debug Message: Error. String Not Found. Table: TitleWnd String Name: NewGameBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: ContinueGameBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: SaveGameBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: CampaignBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: MetaverseBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: OptionsBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: TutorialsBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: CreditsBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: QuitBtn
Debug Message: Error. String Not Found. Table: TitleWnd String Name: Loading
Debug Message: Set mouse.
Debug Message: Set update timer.
Debug Message: Popup Manager Update: Updating window with ID=0
Debug Message: Popup Manager Update: Unhiding FullscreenBink
Debug Message: No files found matching mask ./Data/\*.xml
Debug Message: No files found matching mask ./Data/English/\*.xml
Debug Message: Clear data definitions.
Debug Message: Killing ship styles:
Debug Message: No files found matching mask C:\Documents and Settings\Simon de Vet\My Documents\My Games\GC2DarkAvatar\ships\*.xml
Debug Message: No files found matching mask ./Data/ShipTemplates/\*.xml
Debug Message: No files found matching mask C:\Documents and Settings\Simon de Vet\My Documents\My Games\GC2DarkAvatar\shiptemplates\*.xml
Debug Message: No files found matching mask ./Data/English/\ShipStyles\*.xml
Debug Message: No files found matching mask C:\Documents and Settings\Simon de Vet\My Documents\My Games\GC2DarkAvatar\ShipStyles\*.xml
Debug Message: No files found matching mask ./Data/\FleetFormations\*.fleet
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2Gfx\Planets\C0*.png
Debug Message: No files found matching mask Gfx\Planets\C0*.png
Debug Message: No files found matching mask gfx/Terrain/1SideN*.png
Debug Message: No files found matching mask gfx/Terrain/1SideE*.png
Debug Message: No files found matching mask gfx/Terrain/1SideS*.png
Debug Message: No files found matching mask gfx/Terrain/1SideW*.png
Debug Message: No files found matching mask gfx/Terrain/2SideN*.png
Debug Message: No files found matching mask gfx/Terrain/2SideE*.png
Debug Message: No files found matching mask gfx/Terrain/2SideS*.png
Debug Message: No files found matching mask gfx/Terrain/2SideW*.png
Debug Message: No files found matching mask gfx/Terrain/3SideN*.png
Debug Message: No files found matching mask gfx/Terrain/3SideE*.png
Debug Message: No files found matching mask gfx/Terrain/3SideS*.png
Debug Message: No files found matching mask gfx/Terrain/3SideW*.png
Debug Message: No files found matching mask gfx/Terrain/4SideN*.png
Debug Message: No files found matching mask gfx/Terrain/4SideE*.png
Debug Message: No files found matching mask gfx/Terrain/4SideS*.png
Debug Message: No files found matching mask gfx/Terrain/4SideW*.png
Debug Message: No files found matching mask C:\Documents and Settings\Simon de Vet\My Documents\My Games\GC2DarkAvatar\ships\*.shipcfg
Debug Message: Danger Will Robinson, no Stars!!!!