I had the same problem with the installation program on my XP system. I was able to get around the installation hangup by running the installation program in XP, and choosing the settings that I knew I would be using in .63, or any settings, to just get the thing installed. Then to finalize the settings, I ran the setup program in the game directory from .63, using the /v3 command line switch that becomes available after patching with the 1.5 patch. The game sets up and runs fine at that point.
I like to run these games off the hard drive, which creates a problem with this game, since it checks for the CD volume labels. I was able to mount hard drive directories and assign them labels (and modify the take2.ini file), but the maximum amount that can be recognized is 4. I can mount the other two, with the MSDEX errors, but the setup program only recognizes the first four. Does anybody know how to "fool" a label checking routine? I've messed with the .ini files for the game, but haven't hit upon a magic combination.
So far my only workaround is to create two conf files, one for CD's 1-4 and the other for CD's 1-2;5-6, each with it's own shortcut from Windows. This is obviously a drag, as it requires shutting down the game and restarting it from the other icon. But for me it's not much worse than tracking down CD's and swapping them.