i had previously installed RC5. i attempted to install RC6, in a different directory to the previous install. the main menu loaded but the button images didn't - the console indicated that freeorion was looking in the wrong directory - the directory that RC5 was installed to. so i uninstalled everything and installed RC7 (the new version with python) into the initial directory, and it all works apparently as intended. so i guess perhaps the RC7 install doesn't set the working directory correctly?
The issue here is probably your pre-existing config.xml in C:\Documents and Settings\UserName\Application Data\FreeOrion
If this file is not present, such as after a fresh install, it is created when FreeOrion is run. If you have an older version of the file that's incompatible with the newer release, it will be loaded, and the loading will fail, or might succeed but point to the wrong location for images and such. So, after installing a new release, delete that file, and probably the entire contents of that directory, since your old saves are probably incompatible as well, and you don't need the log files for anything.