Did you use DOSBox & the instructions here?: http://www.gamesas.com/index.php?/topic/479044-how-to-get-the-past-games-to-run/
If that didn't work there's an auto-setup exe here (it includes DOSBox) with all the patches included. http://daggerxl.50.forumer.com/viewtopic.php?f=8&t=283&start=0
Thanks for posting this! It worked beautifully and I was playing Daggerfall within minutes.
One question for all your geeky type people: In the instructions, it says you can smooth out the graphics, which for me are so blocky I'm having a hard time reading text. I tried to follow the instructions by opening up the DosBox.conf file and editing it. When I try to save the file, it tells me the file already exists and do I want to save it. I say yes. Then it says:
Cannot create the c:\program file (x86)\Bethesda Softworks\Daggerfall\DosBox.conf file (which is the path where the file is located). Make sure the path and file name are correct.
Then I thought maybe it was because the file was open so I tried to save it as another file name. It says I don't have permission to save to that directory. WHAT? I'm administrator on my computer. So what am I doing wrong here?