As far as I know, the installer is 16 bit, which 64 bit version of Windows are not able to run. Also, I have Windows Virtual PC installed, but 3D performance is so low that I never dared to run more than a word processor in the VM.

What I did for Vista 64 was install it in virtualpc then copy the installed game out of there.

I'm also trying to do this, but on Windows 8 Pro 64-bit. I have managed to get the game running (sort of). So far I have:

1) Installed the deluxe edition of the game on an old XP machine (both I-War and Defiance).
2) Zipped up the Particle Systems folder and the HKEY_LOCAL_MACHINE\SOFTWARE\Particle Systems branch of the registry.
3) Unzipped the game into the C:\Program Files (x86)\Particle Systems folder on the Win 8 machine, added the registry keys.
4) Copied the video and audio from the CDs into the \psg\resource\video and \psg\resource\audio_l folders
5) Installed nGlide and set it to 1920x1080, 4:3 ratio.
6) Created a shortcut to the game:
"C:\Program Files (x86)\Particle Systems\Independence War\IWar.exe" -b -16 -800x600 -disk
7) Edit the dreadnaught.ini file in the game folder (I may have tried running the game first to create it). Add the following lines:
VIDEODIR "C:\Program Files (x86)\Particle Systems\Independence War\psg\resource\video"
DIALOGUEDIR "C:\Program Files (x86)\Particle Systems\Independence War\psg\resource\audio_l"

Now when I run the game, it plays fine running well in 3DFX mode, but it crashes when I complete a mission.

Anyone know if this a known problem with the nGlide wrapper?

Either that or you'll want to emulate Win98. This would probably be a good place to start looking. I'm not sure it's possible otherwise. Had the same problem with some of my old games but I never got around to working out a work around.

To be honest you're better off buying the GOG version because they added a load of compatibility fixes for modern OSes.

Otherwise it's very difficult to get the game running properly on a modern PC.

I've managed to get the game completely working except for the crashing upon mission completion. Apparently this was a recognised problem a while back, relating to the sound. If the game is started with -xsound (no sound), it no longer crashes.

It would be nice to confirm whether the GOG version would fix this, its a shame there isn't a demo version to try.

The GOG versoin runs flawlessly, and during sales it is cheap to buy as well. You can't really do anything wrong.

Once you bought and tried out the GOG version, can you please report back your findings?