I have the game running now, with the only problem being a laggy menu screen.
when running in software renderer, the audio was all screwed up, and the other two options wouldn't work as the game would crash after the intro video.
Then today I wanted to play Gothic, so I used this fix http://windows7forums.com/windows-7-games/35485-gothic-i-ii-not-working-windows-7-a.html
After installing this fix (which works but the game lags if draw distance is too high) I decided even if the audio is screwy I would put up with it and try to play Gorky 17.
Instead, the dialog in the game is running fine in software renderer, and I am not experiencing any graphical errors. No invisible characters, wierd lines, etc.
It is just running with no problems, except that the menu is laggy, but the game is running great. I played for an hour getting my butt kicked, saved, reloaded to make sure it was ok. It was. Played a little more, shut off my computer, came back, loaded it up.
So if you have Gothic and want to play Gorky 17 try this and see if it works for you as it does for me.
My specs are GeForce 8400gs 512 mb, 2.2 Ghz processor, 2 Gb RAM, and I have the latest drivers installed.
I know next to nothing about computers, but this is the only thing I have put on my computer since installing Gorky 17, so confirmation would be great.
edit: I forgot to mention that Both Gothic and Gorky 17 are located in my GOG folder, as I bought both games from this site. This may also be a factor in getting it to work.