Its a bit late, but Ive found a way to get the 1.7 patch working on XP SP3. I used to get the 16bit program error. I used 7zip to unpack the patch file on to my desktop. I installed the game into its default directory. I copied the 'setup' file from the cd into the game folder. Then clicked to run the setup file (unpacked from the patch) on my desktop and it patched the game. I was at v1.3 and now Im at v1.7
HTH