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Try a fresh install sounds like a good idea, then just install the 1.08 patch.
 
Why did you install 1.07?
 
That is a new one on me! never heard of that before, you should be able to patch 1.08 on any previous version including the prefered method of a fresh install from disk.
 
Are you saying it crashes after downloading and before you run the patch program to install it?
 
Create a new folder on the desk top call it EU patch
Then when you download the patch, change where it says it will save to, to say the new folder you just created. Then you should not have a problem.
 
yes that may be a good place to start.

Please run a DirectX Diagnostic:
Start menu –Run - then type Dxdiag, then select each tab across the top of the window, and run the tests on each tab. Then select “Save All Information” button in the lower right of the window. This will bring up a dialog box to allow you to select a name for the file where the information will be saved. You can save it right on the desktop as this will make it easy to find. Then copy the contents of that file from the start to the heading that says “DirectX components” then paste what you have copied into a post in this thread
 
The big thing that jumps out is the VIA audio. It could be the source of your troubles.

As for your patch question Download and install 1.08 and try it.

Save it to the directory C:/Downloads/EU2/