I'm having a lot of problems with Wiz7 as well. I've played (and finished) Wiz6 now without a problem. The sound thing is a minor nuisance so I turned it off.

I didn't do a real install, I just used an old zip from an installed version (this is a DOS game so why not), which used to work on an old PC (486).

I used the default DOSbox config files on my system, specs:
XP Pro Sp1, P3m 1 GHz (laptop Inspiron 8100), 512 Mb RAM, Geforce 2Go, i815 chipset, latest BIOS and video drivers.

What happens?
Default file versions. Both DOsbox 0.58 and the CVS version.
Dosbox just quits with some vague error message:
Paging disabled
LFB Base at address C0000000,page C0000
MIDI:Opened device:win32
WTF rx readb
WTF rx readb
Exit to error: an unsupported feature
Press enter to continue.

When I patch the game (pentium fix, is this really needed in Dosbox?), I get initialization errors (can't load system fonts). I've got an additional patch as well, which contains some other files, not ds.exe, does that make a difference?

I'll try to use the other config files and see if that helps.