AHA! I figured it out, I didnt have my locale changed to taiwan (or simplified chinese) and once I did that with app locale, it started installing correctly. Heres how to do it if anyone doesn't know how:

****NOTE**** This is for Windows 7.

1. Place the AppLocale installer (apploc.msi) in your C: drive.
2. Go to your start menu, type cmd in the search box.
3. Hold down crtl+shift and click on cmd.exe.
4. Select Yes when a dialog asks if you want the program to make chances to your computer.
5. The command prompt should show C:\Windows\System32.
6. Type cd\ and press enter to navigate to the C: drive.
7. Type apploc.msi and press enter, the installer will appear.
8. Install the application.

Link to DL app locale installer:Download Here

Great you figured it out! See you ingame!

What nuja said is what you all have to do whenever you install a foreign language game. The time when Japanese DBO comes online, you will have to change your locale again if you are planning to go on their server.

yeah, thought I had it on the locale already, since i play chinese Dragon nest as well ._.

Thank you for this info. I shall include your method in the Guide!

Thank you nuja for the info.

Ok, so this App loader thing works for win 7, how about... *gulp* vista?

App locale is built into Windows Vista, heres how to get to it/run it.

***NOTE***This changes the Language in which programs are installed and ran (However it will not change your computer language) make sure you have installed the language you need for the locale from Windows Update before changing your locale.

Step 1. Go to Control Panel and click on “Regional and language options” or (if on Category view) “Clock Language and Region” and then “Regional and language options”.

Step 2. Click on administrative tab in the Regional settings.

Step 3. choose your Locale (which is simplified chinese,which should look similar --> 简体中文)

DONE.
( I grabbed this off of google with a little bit of searching and edited to you're situation ^^)

Alright, so I did the stuff in that quote, but I still get an error saying "The filename, directory name, or volume label syntax is incorrect." Any idea? I'm running Vista 64-bit btw.

your locale isn't set right, thats the problem, did you try the 1st guide i posted? I believe it should work even tho its vista, frankly window 7/vista iz the same.
If not, post it on here, i'll go search for a solution if so.