Well, all I know for sure is that it worked to not extract the mod files directly into the EU folder; instead, I extracted them into a new folder, and cut and pasted the contents of that folder into the EU folder. Trying the other way did not work for me in Windows 7. Even my method didnt work the first time. At one point, even my regular, unmodded game wouldn't even work, so I had to do a fresh new install of the regular game.
After running IGC a few times, it seems to have somehow worked out the bugs and now usually starts without a hitch, but even after my first successful install, I got error messages and CTDs for the first several attempts. No idea if I did something right, or if it was all just luck.