I just bought this game and downloaded it to a custom folder. All three parts. Now, setup cant find part 2. It says put in the setup folder, which it is in. Any help? I have windows 7

Is this custom folder outside of Windows' libraries (Documents etc.) and/or Program Files? It may be a permissions thing, or Windows placing the downloads in virtual store. Create a new folder directly on your hard drive, for example:
C:\Downloads\
Move the installation files to there. You can also create a 'Baldur's Gate' subfolder if you wish, like so:
C:\Downloads\Baldur's Gate\

I am having the same problem with all multi-pack downloads. Nothing I try seems to get the installer pack 1 to recognize the existence of the other packs. I thought it might be a naming issue, but no matter what I try it doesn't work.

I am running Windows 8.1 as administrator and have tried all compatibility settings. I have an Intel I7 with 32 GB memory and NVIDIA GeForce GTX 770.

I tried the new download directory solution, no dice.

I really need a solution to this problem. Thanks in advance.

Screenshot of the directory you are running the setup from?

I have solved this problem. It is a naming convention issue. The answer is on the GOG site but hard to get from my POV.

Apparently, the first installer is *.exe and the rest are ???_2_.??bin ???_3_??.bin, etc

Unless these *.exe downloads are renamed to *.bin, the installer doesn't know how to find them,

There is a better explanation on the site, but I am having my usual trouble locating it.

What internet browser are you using to download with, that is renaming the .bin's to .exe's in the first place?

Firefox