Sorry for digging out this old thread, but I ran into quite similiar problems on my XP64 box and would like to share the way, I finally got it sorted out:

Any Win32 application will not get access to the Windows\system32 folder which is intended for 64bit applications. Instead it's (transparently) redirected to the Windows\SysWOW64 folder which has the same structure and contains 32bit runtime files.

So my remedy was to get the GM.DLS from "Windows\system32\drivers" and put a copy to "Windows\SysWOW64\drivers\" and additionally to "Windows\SysWOW64\drivers\etc\", just to be sure :-)

After doing so, installation did not complain anymore and the application seems to work properly.

I hope this may help also on other 64bit installations...