The DivDialogSystem.dll file is in the root.rar file on the play CD. If there is a problem with your CD, that file is small enough to email or upload somewhere. Check the install procedure again, though, as you may have just missed selecting that file when extracting the rar files on the play CD.
If you browse to the Divine Divinity folder in Windows Explorer and delete everything there, you should be able to start the install program again without having it jump right to 100%. If you do a minimal install rather than a full install, the game might not ask for disk 2 until you choose a character (the female wizard character data is on the play CD, the rest of the character data in on disk 2). A minimal install might still want disk 2 to get the male warrior data, but just getting some of the data could conceivably avoid whatever is causing the problem with the full install.
