What game version are you running? That mod only works with 1.05. I remember the non-english path name used to be a problem for earlier game versions and I'm pretty sure it was fixed at some point, but I don't remember if it was 1.1 or not...Well, if the mod authors can't help you then nobody can, IC isn't likely to be supporting versions that old now.
Annatar, we have try to help him... but he have the same problem with all mod that he have try... not only 7DS...
About the non-english path name, it is what i have think and why i have send him here for ask...
Now, it is the second guy who resolve the problem by deleting the PipelineEffect ... who is related to pixel shader... only one file is different from the vanilla 1.05 game, the GS_ShieldImpact.fx ... and one one line is different, in the section float4 related to the floot4 color... Will directly inform Dan about it... Not sure that the mod itself is bad since it work for a lot of people... but two people having a identical problem and resolving it with the same method is more that abnormal...