Well, I gave up on the 1.2r. I was actually able to install and get to the WPS!!
OK, I have 2.0 RC5 installed, have 3 problems. os2\boot\pscom.sys wont load and gives a sys1201
This is an install issue. If no serial ports are found, this driver should not be installed. A bug report has been on file for this. Just put an REM in front of the line listing this device driver in your config.sys

Mouse and keyboard works fine till I get to the desktop, then I have absolutely no input from either. I tried USB wireless and USB wired mouse and KB.
Make sure you have the following lines in your config.sys file.
BASEDEV=USBEHCD.SYS
BASEDEV=USBUHCD.SYS
BASEDEV=USBUHCD.SYS
BASEDEV=USBUHCD.SYS
BASEDEV=USBUHCD.SYS
DEVICE=C:\OS2\BOOT\USBMOUSE.SYS
DEVICE=C:\OS2\BOOT\USBKBD.SYS
If you do, it could possible be an ACPI problem.
I have XP installed on C: and eCS installed on D: Boot manager shows both drives as C: and boots eCS with an error of course. The only way to boot eCS is to start installation CD, delete BM and set D: Startable.
The Bootmanager should be marked as startable.
The windows partition and the eCS partition should be marked as bootable. Check with LVM. Use LVM to correct is this is the case.
