I personally use Dosbox and followed Bethesda's guide to set it up for the most part. I say for the most part, because I still had to get around the cd-check and then set it up so that dosbox starts up daggerfall automatically. (I'm too lazy to type in two commands that take less than five seconds to enter.)
It's not the perfect game, but I'm having a lot of fun. Not to mention that it runs really smooth on my Oblivion-capable laptop. Although, my character is a rather crazy build. +30 hp each level?! Downsides, luck and personality are about as low as they can go so nobody wants to talk to me.
So far, the only bug I've encountered is a constant looping of the horse/cart sounds, even when I get back on foot. It's no big deal, and going indoors or fast-travelling get's rid of it.
This post has been edited by jack cloudy: Jul 13 2009, 08:52 AM