Shorlex#13709
Yes, I had the issue and the "Couldn't Initialize Graphics Engine" error, but it turned out it wasn't a bug (not on my system anyways).
It had to do with the NTFS permissions on the folder that I downloaded the demo files to, and ran the setup from.
I had dl'ed the game on a user account to a external drive, then copied the game setup folder to my c: drive which transfered the permissions from the external drive with it and didn't allow my Administrator account I ran the setup from, MODIFICATION, permissions (yes it gave "administrators" full permission but for some reason because the specific administrator username account I wasn't specifically giving modification rights (or full) the setup failed to initialize completely (it didn't generate any errors during install, just wouldn't play).
After right clicking the setup files folder and giving the specific admin account I was using full permissions on that folder, I ran setup again and it installed correctly and the game worked. No more "Couldn't Initialize Graphics Engine" error prompt, or can't locate d3....dll (a directx dll it was searching for also).