Q and R, does that have anything to do with it?

Yes, since obviously the installer only checks the first few drive letters - as Hazelke wrote, these seem to be limited to drives D: and E:.

Actually I had the same problems with my own HD/DVD installers for some other games. I never thought that anyone would use a drive letter above I:, but after someone, who did, pointed this out to me, I changed the routine to actively search for available CD/DVD-Rom drives.
Like Endroz I used Inno-Setup, so theoretically it should be possible to change this, but since only Endroz has the Install script you would have to ask him directly.

As a temporary solution just change your drive letters so that one of your CD drives has the letter D: or E: . You can change them back after the installation.

Hey thanx so much, I'll try that and see if that's the solution to the mystery. wow and I haven't even started the game yet lol...

Just tried it and it works. The game installed from E: drive.

Finally I tried to use the XP installer found online (http://www.gabrielknight2k.tk/) and everything sets up fine, but when I run the game I get an error: "Your current display driver is not supported by this game. We require a driver than can display 256 colors or more. You can install a different driver by selecting the appropriate options in Windows setup."

If it means the Windows XP installer for the game, there is no driver selection. And I have been able to get games like Phantasmagoria 1 and 2, Kings quest (all of them) and so on working with no issue on the same rig/setup I am using now.

Any help would be greatly appreciated- I searched the boards and didn't find anything that helped.

Turn your color depth down to 256 colors.

The link seems to have died. Or Endroz has started advertising new roofing and siding.

It is at http://gkpatches.vogons.org, but that is also broken at the moment due to an unrelated server configuration glitch. It will be fixed soon though, probably a few minutes after this message is posted.