There is a video played at that point off the CD. Are you using a no-CD hack? If so, try again with the play CD in the drive. No-CD hacks usually just causes the character to end up a bit north of the council hall with no control, though (the map and inventory respond, but that's about it).
Try running the configuration program and switching to software mode (and maybe reduce the resolution); that helps with some cut scene problems.
Troubleshooting Tips (& manual install procedure) 
