Windows 10.

I can sort of manage to make it run in windowed mode, using an older version of dxwnd, but the game shows some text in the bottom of the screen (copyright or whatever) and that's about it. I can still hear the sound from the mouse cursor moving over the options, but I can't actually see anything than now double+ text I mentioned before.

With "windowed mode" you're talking about borderless fullscreen or do you want to set the resolution and actually play the game in a window?

You can add the following swithces to your Dungeon Siege-Shortcut (rightclick -> properties -> target)

for example:
"E:\GAMES\GoG\Dungeon Siege\DungeonSiege.exe" width=1920 height=1080 fullscreen=false vsync=false maxfps=60


know switches are:
width=1920 height=1080 (set to the desired resolution)
fullscreen=true or false (set to false in your case)
vsync=true or false (user preference)
maxfps=60 (tested values 60 and 120)
nointro=true or false (user preference)
bltonly=true or false (compatibility and to prevent flickering)

As I would need to move the window, it would have to be a proper windowed mode. My desktop resolution is 2560x1440 and I want to run this game to no more than 1080p, though I wouldn't mind playing it at lower resolution if I could resize the window even if that would mean a slightly more blurry image.

Thanks for your reply.

BTW, I tried your solution and didn't work. The game loaded in full screen as always.

Very nice.
Almost there.
There are two issues remaining.
One is, I can't find a way to move the window. If I try to remove the mouse cursor from the game (alt-tab, windows key) then the game's window minimizes. If I click on it to return to it, the mouse cursor is locked within the game.
Second is that for some reason OBS "sees" flashing every few seconds which makes the game unwatchable. The game itself looks fine to my eyes, but the recording not so much. This is probably an OBS issue though.
Regardless, thank you for your help.

You're welcome.
I've noticed the issue with not being able to move the game window as well, but didn't find a solution yet.
For some games i'm playing in windowed mode im using a tool called Sizer 4.0 (http://www.brianapps.net/sizer4/). It works with keyboard shortcuts, but the keys i set up for the tool aren't registered in the DS1 game window.

Personally i never tried to record DS1 with OBS, but i read about other people having issues to get a proper record.
There's a Dungeon Siege 1 Troubleshooting Guide with a section about "Capture the game with OBS" here:

https://github.com/GenesisFR/DS1TroubleshootingGuide#capture-the-game-with-obs

Guess this will use the "fullscreen=false" method (which isn't working for us) - maybe you want to check it out yourself?

Also might be worth to check this section about "borderless fullscreen mode" for recording the game (i didn't checked it yet):
https://github.com/GenesisFR/DS1TroubleshootingGuide#play-borderless-fullscreen

EDIT:
My bad, the Sizer 4.0 tool DOES work, i just forgot i've disabled my WIN-key on the keyboard and i'm using the shortcut:
CTRL + WIN + Z
to call my prefered window sizes.
Unfortunatly you'll need to set the games window position by manually entering the numbers. Here is what i did (with sizer installed and configured with Hot Key "CTRL+WIN+Z" = opens Sizer Popup Menu) :

a) have sizer running in the background (should be minimized in the tray bar)
b) start DS1 in windowed mode 1920x1080 and load a game, so you're NOT watching the main menu
c) in game screen and with the mouse inside the game window (ha ha ha) press the shortcut, e.g. CTRL+WIN+Z and choose from the Popup-Menu "Current as new entry..."
d) Give it a name, enter 1920 for Width and 1080 for Height, then ...
e) either use the drop down menu "Move to" left, top, bottom, etc. OR enter your numbers for "left" and "top", eg. left: 100 and top: 200
f) click OKAY. optional: assign a shortcut for this setting

Next time you press the hotkey for the Sizer Popup menu (CTRL+WIN+Z in my case), you can choose the setting from the list and the game window will move to the position you've entered. Or you can just press the Hotkeyx you've assigned to this setting.
You can always change the settings in sizer by rightclicking on it's icon in the traybar, "Configure Sizer...", choose your named setting and click on EDIT.

OBS captures the footage, the problem is it flashes when there is movement of the cursor over objects, or not. I'm getting tired. Thanks for your help.