Hi FlightJunkie, welcome to the forums!
Congrats on getting a sealed copy of LB2! I hope you are not bankrupt now because of it, or got a thick ear off the missus!
OK, first things first.
I'm betting you get that 'Windows cannot access...' message because your anti-virus program has quarantined your LB2.EXE file. It is a commonly-known problem that many AV software programs detect a false-positive worm or something or other in the LB2.EXE. A false-positive is a positive detection of a false virus. Basically, your AV program is finding something that isn't there. To fix this, go into your AV program settings and exclude the LB2 folder from being scanned - in real-time and for manual scans, if possible.
Then, if you can restore the quarantined EXE to its original location, great! If not, re-install LB2 to the same location as it already is. Hopefully your LB2.EXE file should then remain untouched.
Yes, install the fix package to your LB2 folder and overwrite any files it asks you to. The fix includes the game, patch, and graphical driver patches in an 'installed' state. So it will basically install the game over the top of your installation. The reason you need to install the game at all, is so that theoretically every user has to have a copy of LB2 (a very basic anti-piracy measure) and so that the additional content that the game requires can be accessed from the game CDs or disc images.
Please don't hesitate to post back if you still have problems or any other queries at all.