I've been trying to install Daggerfall onto my laptop. I installed DOSBOX but then realised that as I have windows vista, I'm not supposed to use DOSBOX. Basically, I have absolutely no idea whatsoever what I'm supposed to do so can somebody help?

If you have Windows Vista, you're supposed to use DOSBox.

So get DOSBox 0.73 from www.dosbox.com and follow the official install instructions; http://static.gamesas.com/downloads/games/daggerfall_legal_and_installation.pdf

OK...sorry now, but I'm PC illiterate, anyways, I've been following all the instructions, but when I enter "MOUNT D X:\ -t cdrom", it says "Directory X:\ doesn't exist.

I had this same problem.There are several slightly different installation instructions floating around,and honestly some are confusing,or try to explain the CD and no CD installation at the same time.

There is a PDF from Bethesda,linked in one of the threads,that gives instructions for only the download installation.I found this one the most clear and easiest to understand and had the game installed and running in no time using it.