[MOVED]

Do you insert the disk in the drive like it asks ?

I am guessing that one of the files is corrupt and it is not able to open it it, so it is asking for the disk.

Ok, got it working, typing this so that others who might want to play faerghail might google and find:

I skipped DOSbox entirley since the files might be corrupt. (emulating DOS on PC)
Instead I downloaded the game as .adf files (amiga) and using an amiga emulator wich is called amiga forever 2008. Wich is great.
Didn get it working at first, you need to use the WinUAE system (at default) not the ordinary amiga simulator.
To create a save disk, choose to create an floppy image in the win UAE window, or hit f12 if your already in the game and create that floppy image.
Name it to something you remember so that you can manually type in that you want to save the game there.
(to save in the game, hit o).

Ok, thats it. Thanks for the help guys, especially xian got me thinking in new ways.

Try creating an (empty) file called disk0.id in the game directory.

rcblanke:
how do I do that? the .adf are disk images, arethey editable? I need to work around it so that I can save the game, (its a long game), because the method I suggested dont seem to work. (for that very reason I thought).

I'm talking about the DOS version of the game; creating the disk0.id file in your game directory will allow you to continue after the intro, into the game.

rcblanke is correct, not sure why that file isn't present on yours after installation. I moved the disk0.id file temporarily to another directory, ran the program and got the exact same error message that you had stated in your first post.

Thanks for the helps guys. Im happily running legend of faerghail on my amiga emulator now though, and my first suggestion of how to save the game now works aswell.