My problem was similar, only I was the dumbass who created such a problem in the first place lol.
I didn't check when copying/deleting my mod files prior to installing this mod over the top of GTA IV if I was accidently deleting required files.
Required file for GTA IV to work: xlive.dll.
And of course by placing it back into its rightful place (Main GTA IV Directory) the case was solved :)