You should have a file called "log_init.txt" inside the directory called "data" which is located where you unpacked the mule_windows_1.2.4.zip file. But even if it's not there, I think it's an issue with your video card drivers.
The default drivers coming with Windows 7 may not work with the game. To install the latest drivers from ATI/AMD's website you may also have to use a program like
Driver Sweeper to remove your previous drivers. Otherwise the installation program can tell you that you already hav the latest drivers. At least one user has repored that this solved his problems.