This is all from years-old memory, but might help anyway
If you have an original PC version you can play it either by installing the tool DosBox found at
http://www.dosbox.com/
Take the time to properly read through the readme and configure the setup so your cd drives and game directories etc. are properly mounted.
Of course you can also have a genuine MS-DOS or Win98SE partition and play the game there, that is of you have proper drivers four your hardware. Getting a generic ms-dos mouse driver and execute it before starting the game should be easy, grafic cards usually allow you to use VGA too, proper sound drivers can often be difficult to obtain. I found rebooting a Win98SE partition in ms-dos mode and have a batch execute a mouse command and possibly a sound driver generally worked better for my hardware, than having just an ms-dos partition.
For some strange reason some people reported that sound problems they had vanished if they started pc dm1 in ms-dos before starting dm2. I don't know exactly about this, but the various reports about this phenomenon seem to be genuine to me.
On the Encyclopaedia there are also a couple of patches. In my experience on most systems these patches do help, but on some systems they cause problems. So try starting/playing without patches first. Only if you have problems without the patches try to solve them by installing them.
If necessary, try using the game patch only first. Only use the HMI driver update if you have serious sound problems without it. There are some machines that seem to have more problems with than without that patch, although some machines won't run this game with proper sound if you don't use it. So try out without first, if all works fine, skip this patch, if it doesn't try it.
Before you start the game for the first time you have to run the setup once. When you do, choose manuallly no sound at all. Then test if the game runs at all. Then go back to the setup and try to get proper sound. If you should have a sound card that keeps crashing the setup, at least the game has now saved one configuration that works - albeit soundless - and will allow the game to start. You can get caught in a setup loop on starting the game if you don't do it in that order.
Of course, you simply might play the RTC version of DM2. Isn't exactly the same, but I actually like it even more than the original one.
Parting is all we know from Heaven, and all we need of hell.