OK, more research, try again running cmd with admin permission. Success. Start game. Nope. Keep going down the above page, next up is to check ffdshow, that I installed from the K-Lite package. Looks like I have a slightly older version; might as well update. I'll uninstall and reinstall, using the 32bit. OK, start game. Nope.
OK, moving on, I found a list of when to play which cutscene in the game. It might come to that. I found another technical thing to try, disabling Indeo video. No. I try switching res to 640x480. No. Another thread: [ http://www.systemshock.org/index.php?topic=4007.0 ]. There, at the end, the answer - run the game as administrator. So obvious, in retrospect. The video is playing when it should, but at 1920 it looks awfully pixelated, compared to just playing the file in VLC at its native res. Oh well. I've got enough smoothed out now to start playing for real.
This is a world of difference from Sysem Shock the original. The dividing line between 90's era FPS and 2000's era FPS is somewhere around here. I think history clearly awards it to Half-Life, but it could have been SS2 and Deus Ex. I'm recognizing lots of little things in common, like the square outline around items you can pick up, and the error message voice when you pick up a phone.
Something that's not working is all this empty space that doesn't seem like a real place humans actually live. But its early in this age of FPS, and even years later this is hardly a problem that's been solved. We need the game equivalent of Star Wars; something that shows everyone what a lived in world looks like. Maybe that will be the next generation of games.
Even if I 'only' get a game that's kind of like Deus Ex, this is going to be great. There are still some negatives, like the crazy kitchen sink UI from System Shock. It looks like they've cleaned it up a lot, and its not covering half the screen, but there's still user controls squirreled away all over little popup windows all around the screen. I can see how this evolved into Deus Ex's even more streamlined, but still cluttered, interface. I don't know where it really went from there; nowhere. Deus Ex 2 was overly simplified for the console market, and Deus Ex 3 came out years later, again simplified.
The physics is a problem in SS; everything feels like walking on the moon.