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ekj7: I had this same problem on Win7 with an AMD video card (HD7870), and setting the Win98/ME compatibility flag worked for me as well. Thanks for the tip!

When the game started, the graphics were a bit messed up, especially the water. This was fixed by running the "PR2Config.exe" file in the game's install directory (or through Start->All Programs->GOG.com->Port Royale 2->Settings) and putting a checkmark in "Compatibility mode for reflections".
Yes, even though I am not tired of Port Royale, I had to update the AMD screen drivers, and even with the newest version I can now play the game by setting the Win98/ME compatibility flag!

Thank you for the advice :)
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bprescot: Raised this issue in another thread, but creating a new thread to see if that will generate more ideas for fixes.

In Win 7, I'm unable to launch this game. (XP is fine, so is Vista, but I'd like to use my Win7 machine). gogwrap launches, pr2 launches.... then nothing happens. I've set compatability to xp (sp2/3) 98/ME, etc. to no effect. Same with running as admin, disabling UAC, rolling back/updating graphic drivers, running from shortcut and directly from PR2 exe file...

System is Win7 64 (w/ latest updates)
ATI Radeon HD 5770 (now w/ latest drivers, but have tried 12.1 and 12.3)

Any ideas or suggestions?

Thanks in advance!
setting compatibility mode to win98 did the trick for me, nothing else needed.
all shown win versions were no help to start it ;(
I don't know if you guys already tried this:

For me the setting high DPI was making a huuuge difference. AFAIK the same setting exists under W7

https://www.gog.com/forum/port_royale_series/pr_2_still_wont_load_at_all_like_many_people_here/post6

I am using W8.1 and it is running fine with the following settings:

Just to be on the safe side, I changed under properties (right click on pr2.exe, select properties)

tick on compatibility mode and change it to Windows 95

deselect (if choosen)
mod for reduced colours
640 * 480

select high DPI value deactivated
Run program as administrator

and deselect one drive

the rest depends a bit on your graphic card as well, it has to support some minimum values as well, would need more information on this to answer honestly :P

with this settings it is running smoothly on my W8.1
I've tried all this stuff including DEP and it still won't run on my Windows 7 64 Bit system. It's amazing gog still hasn't addressed this issue all these years later.