I'm running both Daggerfall and the Arena cd version with no problems at all, you just have to configure dosbox properly. And you can actually play Daggerfall with out the CD, but you will need it to install it, all of that is explained in the sticky.
I can explain how to install Daggerfall in XP/Vista here to my best extent:
First you download http://www.fileplanet.com/114400/110000/fileinfo/Windows-XP-Daggerfall-Install. With that you can install Daggerfall to a directory of your choosing, for now we say the default C:\Dagger.
After it is finished with installing copy all files ending with .VID on the Arena2 folder on the disc to C:\Dagger\Arena2
When you have copied the files go to the C:\Dagger\ folder and find a file called Z.CFG and open it in notepad.
Near the top you will see two lines called path and patchcd. Change them so that it says:
path c:\dagger\arena2\
pathcd c:\dagger\arena2\
(Note that if you want to move Daggerfall to a different location you will have to edit it to the correct path)
Now download and install http://dosbox.com/.
After Dosbox is installed go to the Dosbox folder (default is C:\Program Files\Dosboxx.xx) (X.XX is version number, current one is 0.72) and find the file called dosbox.conf. Open it and paste the contents of the codebox below over what is already there:
# This is the configurationfile for DOSBox 0.72.# Lines starting with a # are commentlines.# They are used to (briefly) document the effect of each option.[sdl]# fullscreen -- Start dosbox directly in fullscreen.# fulldouble -- Use double buffering in fullscreen.# fullresolution -- What resolution to use for fullscreen: original or fixed size (e.g. 1024x768).# windowresolution -- Scale the window to this size IF the output device supports hardware scaling.# output -- What to use for output: surface,overlay,opengl,openglnb,ddraw.# autolock -- Mouse will automatically lock, if you click on the screen.# sensitiviy -- Mouse sensitivity.# waitonerror -- Wait before closing the console if dosbox has an error.# priority -- Priority levels for dosbox: lowest,lower,normal,higher,highest,pause (when not focussed).# Second entry behind the comma is for when dosbox is not focused/minimized.# mapperfile -- File used to load/save the key/event mappings from.# usescancodes -- Avoid usage of symkeys, might not work on all operating systems.fullscreen=truefulldouble=falsefullresolution=originalwindowresolution=originaloutput=surfaceautolock=truesensitivity=100waitonerror=truepriority=higher,normalmapperfile=mapper.txtusescancodes=true[dosbox]# language -- Select another language file.# memsize -- Amount of memory DOSBox has in megabytes.# machine -- The type of machine tries to emulate:hercules,cga,tandy,pcjr,vga.# captures -- Directory where things like wave,midi,screenshot get captured.language=machine=vgacaptures=capturememsize=16[render]# frameskip -- How many frames DOSBox skips before drawing one.# aspect -- Do aspect correction, if your output method doesn't support scaling this can slow things down!.# scaler -- Scaler used to enlarge/enhance low resolution modes.# Supported are none,normal2x,normal3x,advmame2x,advmame3x,hq2x,hq3x,# 2xsai,super2xsai,supereagle,advinterp2x,advinterp3x,# tv2x,tv3x,rgb2x,rgb3x,scan2x,scan3x.# If forced is appended (like scaler=hq2x forced), the scaler will be used# even if the result might not be desired.frameskip=0aspect=falsescaler=normal2x[cpu]# core -- CPU Core used in emulation: normal,simple,dynamic,auto.# auto switches from normal to dynamic if appropriate.# cycles -- Amount of instructions DOSBox tries to emulate each millisecond.# Setting this value too high results in sound dropouts and lags.# You can also let DOSBox guess the correct value by setting it to max.# The default setting (auto) switches to max if appropriate.# cycleup -- Amount of cycles to increase/decrease with keycombo.# cycledown Setting it lower than 100 will be a percentage.core=autocycles=autocycleup=500cycledown=20[mixer]# nosound -- Enable silent mode, sound is still emulated though.# rate -- Mixer sample rate, setting any devices higher than this will# probably lower their sound quality.# blocksize -- Mixer block size, larger blocks might help sound stuttering# but sound will also be more lagged.# prebuffer -- How many milliseconds of data to keep on top of the blocksize.nosound=falserate=22050blocksize=2048prebuffer=10[midi]# mpu401 -- Type of MPU-401 to emulate: none, uart or intelligent.# device -- Device that will receive the MIDI data from MPU-401.# This can be default,alsa,oss,win32,coreaudio,none.# config -- Special configuration options for the device. In Windows put# the id of the device you want to use. See README for details.mpu401=intelligentdevice=defaultconfig=[sblaster]# sbtype -- Type of sblaster to emulate:none,sb1,sb2,sbpro1,sbpro2,sb16.# sbbase,irq,dma,hdma -- The IO/IRQ/DMA/High DMA address of the soundblaster.# mixer -- Allow the soundblaster mixer to modify the DOSBox mixer.# oplmode -- Type of OPL emulation: auto,cms,opl2,dualopl2,opl3.# On auto the mode is determined by sblaster type.# All OPL modes are 'Adlib', except for CMS.# oplrate -- Sample rate of OPL music emulation.sbtype=sb16sbbase=220irq=7dma=1hdma=5mixer=trueoplmode=autooplrate=22050[gus]# gus -- Enable the Gravis Ultrasound emulation.# gusbase,irq1,irq2,dma1,dma2 -- The IO/IRQ/DMA addresses of the # Gravis Ultrasound. (Same IRQ's and DMA's are OK.)# gusrate -- Sample rate of Ultrasound emulation.# ultradir -- Path to Ultrasound directory. In this directory# there should be a MIDI directory that contains# the patch files for GUS playback. Patch sets used# with Timidity should work fine.gus=truegusrate=22050gusbase=240irq1=5irq2=5dma1=3dma2=3ultradir=C:\ULTRASND[speaker]# pcspeaker -- Enable PC-Speaker emulation.# pcrate -- Sample rate of the PC-Speaker sound generation.# tandy -- Enable Tandy Sound System emulation (off,on,auto).# For auto Tandysound emulation is present only if machine is set to tandy.# tandyrate -- Sample rate of the Tandy 3-Voice generation.# disney -- Enable Disney Sound Source emulation. Covox Voice Master and Speech Thing compatible.pcspeaker=truepcrate=22050tandy=autotandyrate=22050disney=true[joystick]# joysticktype -- Type of joystick to emulate: auto (default), none,# 2axis (supports two joysticks,# 4axis (supports one joystick, first joystick used),# 4axis_2 (supports one joystick, second joystick used),# fcs (Thrustmaster), ch (CH Flightstick).# none disables joystick emulation.# auto chooses emulation depending on real joystick(s).# timed -- enable timed intervals for axis. (false is old style behaviour).# autofire -- continuously fires as long as you keep the button pressed.# swap34 -- swap the 3rd and the 4th axis. can be useful for certain joysticks.# buttonwrap -- enable button wrapping at the number of emulated buttons.joysticktype=autotimed=trueautofire=falseswap34=falsebuttonwrap=true[serial]# serial1-4 -- set type of device connected to com port.# Can be disabled, dummy, modem, nullmodem, directserial.# Additional parameters must be in the same line in the form of# parameter:value. Parameter for all types is irq.# for directserial: realport (required), rxdelay (optional).# for modem: listenport (optional).# for nullmodem: server, rxdelay, txdelay, telnet, usedtr,# transparent, port, inhsocket (all optional).# Example: serial1=modem listenport:5000serial1=dummyserial2=dummyserial3=disabledserial4=disabled[dos]# xms -- Enable XMS support.# ems -- Enable EMS support.# umb -- Enable UMB support.# keyboardlayout -- Language code of the keyboard layout (or none).xms=trueems=trueumb=truekeyboardlayout=none[ipx]# ipx -- Enable ipx over UDP/IP emulation.ipx=false[autoexec]# Lines in this section will be run at startup.mount c c:\c:cd daggerfall z.cfg
Now you can run Daggerfall just by starting Dosbox. If the most doesn't work hit CTRL+F10, to get full screen hit ALT+ENTER. To exit dosbox while fullscreen after exiting Daggerfall just type exit and hit enter.