I had an issue with the pre-package as well, but mine was far less... describable. * snip*
When I tried to apply the graphics alone to a vanilla copy, I suffered the same issues as Reverend Josiah. I have checked, and it is not an issue with resolution.
I initially had the same problem as Reverend Josiah - tried to start in full screen mode and got an error message then it automatically switched me to windowed, which worked fine. I looked in the init.txt and noticed these lines -
[GRAPHICS:YES]
[GRAPHICS_WINDOWEDX:1280]
[GRAPHICS_WINDOWEDY:592]
[GRAPHICS_FONT:RantingRodent_Brick_02.bmp]
[GRAPHICS_FULLSCREENX:1280]
[GRAPHICS_FULLSCREENY:592]
[GRAPHICS_FULLFONT:RantingRodent_Brick_02.bmp]
[GRAPHICS_BLACK_SPACE:NO]
Since my desktop resolution is 1280x960, I tried changing the '592' to '960' for full screen, started again, and it worked fine...except then I had the flickering problem that shadowsofwhite describes, so I found the line
[PARTIAL_PRINT:YES:0]
and changed back to
[PARTIAL_PRINT:NO:2]
Now everything seems to work fine except for one thing which will seem like a very noob question, because it is; and it's the same problem I had when I briefly tried to install and use the May Day graphics (I actually haven't even really played DF yet, only installed, generated a world and embarked just to test that it all works).
Anyway, my problem is that certain characters on the menu screens don't show as normal smooth text, but graphic tiles, like both 'o' and 'O', '.' and ',', and also the four arrow keys. Is this normal or am I missing something?