I found a super easy way to get Dungeon Siege working for Windows 7.
When you try to play the game a window will come up with some bull about having compatibility problems. Here is what i did to get the game working perfectly on my Windows 7 x64 (64 bit):
1. Make sure you install DirectX 9.0c since Windows 7 doesn’t come with it!
2. Install the game like normal
3. Go into the directory were you installed it probably “C:Program Files (x86)Microsoft GamesDungeon Siege”
4. Double click on DSVideoConfig.exe
5. It will probably say “Primary Display Driver – Hardware” change it to whatever video card you have. For example i would change mine to “NVIDIA GeForce 8800GTX – Hardware” DO NOT PICK THE ONE THAT SAYS “TnL”
6. you can pick whatever resolution, shadows or filtering you want and click OK
7. Now play the game!
EDIT: If you are going to play Legend of Aranna you have to go into your documents folder go into the Dungeon Siege folder open your DungeonSiege.ini file and copy the first 3 (4?) lines. Go back to documents folder and go into the Dungeon Siege LOA folder, open the DungeonSiege.ini file there and paste it over the first 3 (4?) lines there.