Hey guys it has been quite a while. After a long break from the game and with my exams completed today I gave in to the urge to haul out GalCiv 2 again. After blowing off an impressive layer of dust I experienced similar problems to those above.
I had an extra hiccup that I wanted to share incase anybody else encountered this problem.
I installed off the discs I had first (Gold Edition). After I ran into the registry problem outlined above I tried reinstalling from my discs again. Then a quick google search found this thread. After some grumbling to myself I opted to download the game and the Dark Avatar expansion.
Then I tried to run Dark Avatar from the Impulse menu. The splash screen came up. Play game. I got an error message saying that I needed to run setup or reinstall from Stardock Central.
More grumbling and poking around in the game files. Then I figured it out.
When you install the game from the original discs it places the game in the Stardock directory. When you install the updated version of the base game from Impulse it creates a new folder called Stardock Games.
I'm guessing either of the following two things happened:
1) When I reinstalled Dark Avatar it updated the version of Dark Avatar I had installed in the Stardock Directory
2) When I reinstalled Dark Avatar it searched my computer for a copy of GalCiv2 and stopped looking when it found the Stardock folder install path instead of proceeding on to find the copy installed in Stardock Games.
The simple fix was grabbing the Dark Avatar folder from the Stardock folder and merging it with the Stardock Games install.
All of this was on a Vista machine.
Now I can put off my desire to play no longer. Good day! 
Edit: A side effect of my manual manipulation is that it will no longer launch off Impulse (Presumably because the file paths no longer match - Will this have any effect on future updates?