I have seen a couple of others post about file creation error problems when installing Daggerfall under DOSBox.

I spent hours trying to figure out what was wrong and wanted to kick myself when I figured it out. When installing Daggerfall if you get a whole bunch of file creation errors or could not create file errors in the DOSBox Status Window, then you may have done what I did.

I was trying to install to a directory that had a space in it "c:/Program FIles (x86)". Its either the space or a naming method that DOS won't recognize.... DOH! Has it really been that long that I have forgotten these things!

I made a new directory c:/DOS, then edited all my DOSBox config lines to reflect the change, and voila! It installed and ran without a hitch.

Yep and it's also worth noting that the Program Files folder has some protection systems in place on Vista and Windows 7, which might cuase problems with dosbox.