I've got it working with videos now. Only thing is when I turn on MIDI I get "Error does not indicate error." This is an apparent issue with XP systems. I've tried using different sources for MIDI audio but don't get anything.
edit - got it. From GOG forums...
Quote:
What you need is to edit tex.ini and change "DriverName=MIDI Mapper" to "DriverName=Microsoft MIDI Mapper".
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Thereafter in the game I chose my audio device as Microsoft MIDI Mapper and I hear the music. This apparently causes a crash later in the game at Gideon's Gallery, so people should mute MIDI there but otherwise it should be okay.
Plenty of good threads at
GOG.