Solution: For some reason Microsoft did not include a simple file which is needed to run thousands of classic programs (including their own). This file is ctl3d.dll. Download it here and save it in the c:\windows\system folder. Note that there may be several windows\system folders on your machine but only one hooked directly to the c:\ folder. This file is very small (26K) and will download rapidly.

If you are unable to run setup, Click here to download a zipped file of the .dll files. Unzip it to the c:\windows\system folder.