Are you shutting down all non-essential programs (especially anti-virus) before trying to start the game?

If you run dxdiag (click Start | Run, type in dxdiag and hit Enter), does it report any problems? There are a couple of tests under the Display tab.

Did you try the configuration test at other resolutions? If you just hit Apply & Close rather than running the test, does the game start ok?

Try setting your desktop resolution and the game resolution to be the same. A couple people had problems with DirectX's resolution switching on startup, though I don't think that effected the configuration test (can't hurt to try).

Try deleting the files config.div, slashed.cfg and slashed-d3d6.cfg in the Beyond Divinity folder (if they exist), to force the configuration program to recreate them. The prompt to reset the configuration should do the same thing, but manually deleting them guaranties nothing can be carried over to the new versions.

Check if there are files called debug.lst or error.txt in the Beyond Divinity folder (both are text files, and can be opened in Notepad, etc). If so, do they contain any error messages that might be informative?

Lady_Rain describes an MS patch for video related problems in Win XP (included in SP2) in the topic CRASHING TO WINDOWS

This isn't quite the same problem, but there are additional suggestions in the topics;
yet another "Game simply won't start!"-thread and BattleFields N00b ?