Disclaimer: These instructions were written for Windows (XP/Vista/7). I gleaned much of this from Bethesda's instructions, and they are simply offered as an alternative to those who find the original instructions hard to follow or otherwise non-functional. If you've followed Bethesda's instructions but are getting a "Looks like you have inserted the wrong CD. Please insert your Daggerfall CD in your CD rom and try again." error, skip directly to step 5.
1.) Download Daggerfall from http://www.filefront.com/14005983/The-Elder-Scrolls-Daggerfall-Full-Free-Game or another site of your choosing. Bethesda's servers are probably getting hammered, as I've had consistently poor download speeds for the past few hours. You'll be getting a file called "DFInstall.zip" which contains Daggerfall and the latest patch. Keep track of where this file is going, as we'll obviously be needing it later.
2.) Download and install http://www.7-zip.org/, since it's free and generally awesome at extracting compressed files. Once this is done, right-click "DFInstall.zip" and choose "Extract files." It will ask where you want them extracted; type in:
c:\dosgames\
This extracts the CD directory and patch to the "dosgames" directory.
3.) Download and install http://www.dosbox.com/download.php?main=1. Launch it and you'll come up with a black screen and a prompt that simply says "Z:\". Type this in:
mount d c:\dosgames\dfcd -t cdrommount c c:\dosgames -freesize 1000d:install
This will mount a virtual CD drive with the Daggerfall install directory, a C drive with appropriate space, then switch to the virtual D drive, and launch the install program, in that order. You'll want to select the "huge" install option. All of the other default settings are fine. Proceed with installing the game. I'd write more specific instructions out but it should be pretty straightforward.
Once this is done, you'll go into the sound setup program. Select "Auto Detect". If it gives you a SCSI-drive warning, ignore it and proceed (unless you are using an actual SCSI drive, which I highly doubt; if you are, you know what it is and how to proceed). It will probably come up with Soundblaster 16; this is fine as long as your IRQ is 7 and DMA is 1. These are default DOSBox settings and they shouldn't be anything else unless you've tampered with the configuration file. Soundblaster 16 is also fine for the MIDI settings. Daggerfall has different music output depending on what MIDI card you have selected; once you feel comfortable with editing this then you can come back and find the one you like the best. Personally, I prefer ESS AudioDrive for MIDI output, but it is ultimately up to you.
Once everything is set up, exit the program. The prompt should read "C:\DAGGER\"
4.) Install the patch by typing
dag213
Answer "yes" to any prompts it may give you. We're getting close, but not out of the water yet.
5.) Actually launching the game is where most people seem to get tripped up, so I'm going to offer an alternative solution. Instead of mounting the Daggerfall CD, we're going to change one character in the "z.cfg" file to point Daggerfall to its own directory. Close DOSBox and go to the directory where Daggerfall is installed; assuming you followed this guide, that directory would be "C:\dosgames\dagger\"
Double-click "z.cfg". If it asks you what program to open this file with, choose Notepad.
Find where it says pathcd d:\dagger\arena2 and change it to pathcd c:\dagger\arena2
This is a cheap but effective way of getting the game to run. DOSBox has come a long way but Daggerfall is a finicky game and CD emulation is still not perfect. This will not display movies. To get movie output, you'll have to copy the *.VID files of the "dfcd\dagger\arena2" folder to the "c:\dosgames\dagger\arena2" folder.
6.) Start up DOSBox, type in
mount c c:\dosgames -freesize 1000c:cd daggerfall z.cfg
...and you should be running Daggerfall.
7.) This step is totally optional but highly recommended, and for people new to DOS it is very easy and effective. If you want DOSBox to start Daggerfall automatically this is the way to go. Go to Start->Programs->DOSBox .73->Edit Configuration. This should pull up "dosbox.conf" in Notepad. If it asks what program to open this file in, choose Notepad.
Most default settings are fine, but if you'd like Daggerfall to start automatically, scroll down to the very bottom of dosbox.conf. Copy the code in step above and paste it in the section that says "[autoexec]". Save the file.
DOSBox is now set up to run Daggerfall automatically, assuming you followed the rest of the directions to the letter.
I took this from another thread; thanks to Kextra for posting the links. These include more quests and bugfixes that don't come with the final patch. Optional but highly recommended.
http://www.uesp.net/wiki/File:QUESTPAK.ZIP
[Includes CompUSA, XTRAQST, XTRAQST2, XTRAQST3, XTRAQST Patch, XQSE, FIXQ001, LBSWORD aswell as some bug fixes. Basically, it adds a truckload of new quests to the game and fixes a few things on the way]
http://www.uesp.net/wiki/File%3a%44FQFIX.ZIP
[Fixes many bugs found in the original Daggerfall and CompUSA addon. Highly recommended]
http://www.uesp.net/wiki/File:FACTFIX.ZIP
[Fixes some errors in the FACTION.TXT file]
http://www.uesp.net/wiki/File:BIOG00T0.zip
[Fixes some faults in a Mages biography file]
All those files (along with patch 213) should make Daggerfall as bug-free and diverse as is can be (at the moment).
If anyone has any questions feel free to ask in this thread. If I don't get to them someone else who knows what they're doing will.
Last but not least, thanks to Bethesda for finally releasing one of the greatest games of all time.