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BoE isn't compatible with dx7, change it to dx9.
When you start warband a window shows up on which you can choose the module.
Click on "Configure".. then switch to the "Video" tab and change the Render Method to DirectX 9.
Even an empty game directory could probably cause this issue, so get rid of any other Warband installation.
if you still get the error then, make a clean re-installation of warband.