Ok i figured it out. I think because I live in europe and choose the US setup Everquest made a new dir in my EQ2 dir called LP_REGION_EN_US. This is the dir that the game runs from. its basically a copy a copy of everything in the root dir and then all the patches.
After moving my insom folder and ini file to the right place in this dir everything worked as it should.
Hope maybe this wll help anyone else who was confused as I was
-Z