As mentioned in the FAQ.txt inside the Fallout 2 installation folder:

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== On startup, fallout crashes with a 'Failure initializing input devices' error. ==
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In ddraw.ini, in the [input] section, change BackgroundKeyboard to 1 and see if that fixes the error. If it doesn't change BackgroundMouse to 1 too.

This solution worked perfectly for me.

Have the same issue. I'm trying to play on windows tablet with no keyboard and mouse. Only touch screen. Put 1 into config for keyboard and mouse but that didn't help. Still get error about input thing.

Solution for "failure initializing input devices fallout 2 problem" and "an unsupported version of fallout 2 detected" for windows 7.

1) Don't install game in progam files directory - install in C:/fallout2 for example.
2) If you used old CD with fallout 2 to install it you won't have ddraw.ini.
3) Patch your game from 1.0 to 1.02 - download "f2v102eu patch" (if you got patched version than don't bother about this step)
4) Patch the game with high resolution pack - download patch,extract it in folder with your fallout2.exe file(you need
Fallout2_High_Resolution_Patch_4.1.7.exe )
5) open "manually edit config" inside patch program (f2_res_Config.exe)and change ALT_MOUSE_INPUT=0 to ALT_MOUSE_INPUT=1 value,than

click enable patch and click done.
6)enjoy

Hi, did you get it working? I'm playing Fallout 1 on a Windows tablet, and eventually got it working.

Well, i just used mouse adapter in my usb...