Saw a similar post like this referencing an LOC engine issue, but it involved a stripped down version of Vista, and I'm running a full version of Windows 7.
Installed Demigod fine, and played a few quick skirmishes, but after creating an online profile and updating the game via Impulse, when I try to run the game I get this error message:
<LOC Engine 0028> The product appears to be validated but the machine SID doesn't match. Deleting sig.bin file. Try re-activating.
Re installed the game and re updated it but got the same error message again. wtfuxup.