Tomb Raider II is a Windows based game. It never was a DOS-based game.

Once again, did you check if your cd reads properly? As a first step, try copying all files from the cd to a folder on your hard drive and see if it copies okay.

Also did you try running setup.exe off the cd's root folder?

I am trying to help but you have to provide more information here. So far this seems to me like a cd read error.

Okay. I thought it was dos-based. Anyway...I tried to run the setup.exe...it wouldn't even do that. I made a folder on the hard drive for Tomb2. I tried copying the game disk content into that. It seemed to copy without complaint. I didn't think to count the number of files it copied. But the result was the same. I could bring up the first splash screen, but it still wouldn't start the installation. I tried the setup.exe from the folder, but still no-go. I ran the dxdiagnostic from the game disk, and it didn't show any problems. But then...I tried to install TR3. It wouldn't install either. Would just go right back to desktop after clicking "Install". I used the explore feature on this disk also. And tried the dxdiagnostic in there. It found obsolete files and several files missing from DirectX. 😳
I have no idea what happened to them. So I went to Microsoft and downloaded the latest DirectX. (I think it's 9.2 or something like that).
At this point I was so disgusted, I went back to play TR1 a while longer. At least I got that one to work with Glidos. 🙁

Though it shouldn't be needed, try right-clicking on setup.exe and setting compatibility mode to Windows 95 or Windows 98. Also running the old dxdiagnostics or dxsetup from the tr2cd was a bad idea. It is a much much older directx version than the one on XP.

It's been a while since I installed TR2 on my XP OS. But I don't remember having any problem. If the installer offers you to install DirectX, don't do it. The version available on the CD is DX5, which will most definitely mess up your system. Make sure you have your DX9 up to date.

As suggested by Doomer, you could try creating a shortcut of the installer exe (Send to Desktop), and run it in compatibility mode (Win95/98).

How will an older direct x mess up your system?

Pretty serious in the worst case.

I don't think I installed DX 5.0. It didn't seem to be installing anything at all.
But I went to microsoft and reinstalled the latest DirectX.

Okay. I tried copying the setup.exe on the desktop. It copied okay, but when I try to use it, it does nothing. Tried the autorun.exe on the desktop. It brings up the first splash screen, same as when I click the icon for D:
Same thing happens when I click Install..."DirectX setup initialization failed". I tried both of these executables in each of the four compatibility modes. With the first two, it gives the same "failed" message I just mentioned. In the last two, I hear the disk spinning faster in the drive, but nothing further happens.
Here's a thought: When I first bought these games back in 2000, I keep thinking I read or heard you had to have TR1 installed before you could play TR2 or TR3. Is this right?
I have TR1 on the pc, but I'm running it with VDMSound and using the Glidos server. Could that mess up the TR2's ability to recognize the presence of TR1?
Also: I used the Explore feature on the game disk. I see absolutely no sign of any Tomb2 game starting executable. 😕
Also: On the disk are three zip files with a .cab extension. My Winzip won't unzip them. My PKZip won't unzip them. I don't know if they need to be opened or not. 😢

You don't need to have Tomb Raider I installed in order to play Tomb Raider II. Also these three cab files are unpacked during the installation and it is there that the game executable resides. You can't unpack them with a tool like winzip though.

Here's what I found out on tombraiderchronicles.com regarding problems installing Tomb Raider II.

Error message when you install or start Tomb Raider :
C:\Windows\System32\Autoexec.nt The system file is not suitable for running MS-DOS and Microsoft Windows applications.
This issue may occur if one or more of the following files are missing or damaged.

CONFIG.NT
AUTOEXEC.BAT
COMMAND.COM

This reminds me to ask you if by any chance you see a command prompt window opening for a second and then closing. Here's what I suggest you try next. Try opening the command prompt by typing cmd.exe in start/run or going to start/accessories/command prompt. Then switch to your drive by typing either d: or whatever your disc drive letter is, and then run setup.exe and see if it produces some kind of an error.

Says "Please go to your Control Panel to install or configure system components"

Is this the error that you get when you manually run setup.exe on your cd drive from the command prompt?

I change the directory to D:, type in setup.exe, hit Enter, and that's what I get. If I type in autorun.exe, it doesn't accept it.

try typing dir to see what is actually there

Didn't do any good. If I use "dir" in the command prompt under C:, it just tells me what is in my Windows directory. If I change the directory to D:, the command "dir" tells me the names of files or folders on the cd. But not how to access any of them.
I've even installed dosbox. But I haven't been able to find anyone who has time to tell me how to access anything on the cd. None of the FAQ's I' ve seen so far have been clear on this point.
🙁

Go to my computer and learn the drive letter of your tomb raider 2 cd. Then try going to the command prompt again, type f: or d: or whatever letter you found when looking at my computer, and then try running setup.exe, but first do a dir command as qbix suggested so that you see you are in the correct location.

I did that. I use drive D: for cdrom. It's actually a dvd-rom drive. I don't have a regular cdrom drive. I don't know if that's a problem or not. I get the same results. typing "dir" tells me what's on the cd. there are 4 directories there. It gives the name of the volume (I'm currently trying to install the tr2demo). It gives the serial number of the volume. Don't know if that's important either. But I still don't know what to type in to access any of the directories or files. I tried to type in autorun and autorun.exe (each one separately) right after the D: it tells me it's an illegal command.
I typed in setup and setup.exe (each one separately) right after the D: It still tells me to go to the Control Panel to etc. etc.

Wait a minute tomb raider 2 is a windows game so how does using the command prompt do anything in running the program. command prompt runs dos files not windows files.

Maybe read the whole thread next time.

So this afternoon I did something different. Caught my brotherinlaw away from his pc long enough to try TR2Demo and the full TR2 on it. My cpu is athlon xp 2000+ (32-bit), his is athlon dual core (64-bit). My video card is Geforce 6600 (32), his is Geforce 6800 (64). I have Windows XP Pro and his is Windows XP Home. They loaded right up on his..."install", "setup"...everything! (although I didn't test the sound on his...that's not my first concern right now)...but it installed on his...But not on mine?
😢
Obviously it can't be damaged game CDs... 😢