I start up the game for the first time, and go to the options screen to configure it for the system. But all the option titles are in the top left corner of the screen, all overlapping each other, and I don't know what anything does.

I'm naturally concerned this will happen in-game as well, putting all title headers in the top corner, and making the game effectively unplayable.

What's going on, and how do I fix this? Also, is it possible to use the official 1.2 patch with the GOG version of IW, and can I use the unified texture packs? :)

Have you contacted and opened a ticket for this problem? Chances are you'll get responses better and perhaps faster that way.