The first thing to check is to see if your current video card is on the supported list for Shrouded Isles. You may view this list by typing in the keyword "video" and clicking on the link "What video cards are currently supported and not supported for Shrouded Isles?" If you see your video card under the "not supported" section, the following solutions may not work for you.
If you have a GeForce based video card installed and are experiencing this error please double check the following:
1: Please make sure you do not have video card driver version 30.82 and below. If you do, please upgrade your drivers from either of the the following links:
Please make sure you have the very latest DirectX version installed on your PC. DirectX 8.1 is located on the SI CD, but you also may want to upgrade to 9.0c from Microsoft's website if the problem persists.