Syntax error: Bad fd number?

>& is not syntax supported by sh. You're explicitly using sh as the shell in that script. You need to rewrite that line as:

wine "C:/D2GS/D2GS.exe" > /dev/null 2>&1 &

>& is the csh syntax (also supported by zsh and recent versions of bash) to redirect both stdout and stderr to a file.

In sh (Bourne (where it comes from) and POSIX), the syntax is:

if ! pgrep D2GS > /dev/null; then 
  wine C:/D2GS/D2GS.exe > /dev/null 2>&1 &
fi

(you've got the wrong ps/pgrep syntax as well; pgrep doesn't read its stdin, so piping the output of ps to it is pointless).

For completeness, the syntax to redirect both stdout and stderr in various shells:

> file 2>&1: Bourne, POSIX and derivatives and fish
>& file: csh, tcsh, zsh and bash 4+ (though in zsh and bash only when the file name is not a sequence of decimal digits, otherwise it's the >&fd Bourne redirection operator).
&> file: bash and zsh 3+
> file >[2=1]: rc and derivatives
> file ^&1: fish

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