Solved this myself - thought I'd let people know. Instead of running the game from the normal exe, I ran it from the options application in the directory instead and the game is running perfectly.
For any of you still having issues with this game, you may want to contact the developer for assistance. We sold it as part of a bundle, but The Whispered World is not a Telltale game and we can't offer technical support for it. The developer's forum is linked below.
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http://forum.daedalic.de/viewforum.php?f=15