Game freezes

You should update your audio drivers. That may not be the main problem, but it may be contributing to it.

And are you running the original Windows 98? Not even Second Edition?
That could be a problem as well.

Have you tried running it in fullscreen mode?

If the debug is reporting it as 1.0X, that's what the game thinks it is. Try reinstalling and using the patch 1.2 on the downloads page on the site here.

Ive tried with all the patches including beta. Does exact same thing. Im running 98SE becouse I prefere it to XP. I have all the updates and have never gad a problem with any game "EVER". I hate to return game to Wal-Mart but will try if I cant find some solution. My resources are 92% free also.

Here is new report. Audio driver is updated but debug not showing it. Why? I tried beta version too, but same affect. As soon as I click next from NEW game screen or campaign screen, it freezes.

Debug Message: Version v1.2 last updated on: Mon Jun 12 18:04:26 2006
Debug Message: *********DXDiag info follows.*********
System Info
Time: 8/29/2006, 08:54:21
DirectX Version: DirectX 9.0c (4.09.0000.0904)
Machine Name: JOE
Operating System: Windows 98 (4.10, Build 2222) A
Languages: English (Regional Setting: English)
System Manufacturer: n/a
System Model: n/a
BIOS: n/a
Processor: AMD Sempron(tm) Processor 2600+, MMX, 3DNow, ~1.6GHz
Physical Memory: 766MB RAM
Page File: 71MB used, 1209MB available
Windows Dir: C:\WINDOWS


Display Info
Display device 1:
Device Name: \\.\Display1\Unit0
Card Name: RADEON 8500 SERIES
Manufacturer: ATI Tech. - Enhanced
Chip Type: RADEON 8500 AGP (0x514C) Rev 0
DAC Type: Internal
Key Device: Enum\PCI\VEN_1002&DEV_514C&SUBSYS_013A1002&REV_00\000800
Display Memory: 63.0 MB
Current Display Mode: 1024 x 768 (32 bit)(optimal refresh rate)
Monitor Name: Sony CPD-420GS
Monitor Max Resolution: 1600,1200
Driver Name: ATI2DRAG.DRV
Driver Version: 4.15.0001.9165
Driver Date: 1/24/2006 21:42:58
DirectX Acceleration Enabled: Yes



Sound info
Sound device 1:
Description: C-Media Audio Direct Sound Driver
Default Sound Playback: Yes
Default Voice Playback: Yes
Hardware ID: PCI\VEN_13F6&DEV_0111&SUBSYS_011113F6&REV_10\BUS_00&DEV_09&FUNC_00
Manufacturer ID: 1
Product ID: 15
Driver Name: CMAUDIO.VXD
Provider: C-MEDIA
Driver Version: 4.06.0000.1096
Driver Date: 7/25/2001 20:07:36
Type: VXD
Other Drivers: cmaudio.vxd
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: Using multilsample setting: D3DMULTISAMPLE_NONE
Debug Message: Game Resolution: 1024 x 768
Debug Message: Running in windowed mode.
Debug Message: HAL (hw vp): RADEON 8500 SERIES
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 resolution modes.
Debug Message: Border size reported as 6 by 25
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: ***** Initializing Game *****
Debug Message: Timer Frequency is 0 1234dc
Debug Message: Initializing sound card.
Debug Message: initailizing bink
Debug Message: No string tables in C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default/Data/*.str
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Movies\*.bik
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Movies\techs\*.bik
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Gfx\*.png
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Gfx\Race\*.png
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\sfx\*.wav
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Music\*.mp3
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Event Music\*.mp3
Debug Message: Create setup screens.
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: * Collectors Edition *
Debug Message: Set mouse.
Debug Message: Set update timer.
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\*.xml
Debug Message: Clear data definitions.
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\Techs\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\ShipComponents\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\ShipDefs\*.xml
Debug Message: No files found matching mask C:\My Documents\My Games\GalCiv2\ships\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Gfx\Planets\C0*.png
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\PlanetImprovements\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\TerrainColorSchemes\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\PlanetDescriptions\*.xml
*DEBUG ERROR: ***Unable to find required tech ImpossibleTech for PirateShip. ***
*DEBUG ERROR: ***Unable to find required tech ImpossibleTech for Starbase. ***
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\Anomalies\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\Events\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\UPIssues\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\Invasions\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\PoliticalParties\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\StarTypes\*.xml
Debug Message: No files found matching mask C:\Program Files\Stardock\TotalGaming\GalCiv2\Mods\Default\Data\StarbaseModules\*.xml
Debug Message: Reading Star Names
Debug Message: Reading Star Names... Done
Debug Message: Error loading mission 16 from C:\Program Files\Stardock\TotalGaming\GalCiv2\./Data/English/Campaigns/Dread Lords Campaign.gc2campaign
Debug Message: No files found matching mask C:\My Documents\My Games\GalCiv2\Dread Lords Campaign\*.sav
Debug Message: Error loading mission 16 from C:\Program Files\Stardock\TotalGaming\GalCiv2\./Data/English/Campaigns/Dread Lords Campaign.gc2campaign
Debug Message: Creating Galaxy
Debug Message: Killing threads.
Debug Message: Kiling civs.
Debug Message: Killing ships.
Debug Message: Killing rallypoints.
Debug Message: Killing misc objects.
Debug Message: Killing stars.
Debug Message: Killing anomalies.
Debug Message: Killing space resources.
Debug Message: Killing colonies and planets.
Debug Message: killing scenario.
Debug Message: Clearing Turn Event Log
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: Loading custom map: ./Data/English/Campaigns\An Unexpected Visitor.gc2map (0 x 31008119)
Debug Message: MissionWnd: Cannot find OBJID Campaign_MiniMap_Window
Debug Message: Num Anomalies: 7
Debug Message: CustomRaceWnd: Cannot find OBJID CustomRace_Tab_Homeworld

Here is new report. Audio driver is updated but debug not showing it. Why? I tried beta version too, but same affect. As soon as I click next from NEW game screen or campaign screen, it freezes.

The hardware/driver information in the debug is take directly from DirectX. So the game is just reporting what windows is telling it.

Have you tried a full reinstall like I advised? It appears that one of the interface files is missing or damaged, and that is the last message in both debugs you've posted. A full uninstall/reinstall should fix this.