If you're trying to run the CD version then it's a known issue in 0.63. You will need to download a CVS build of DOSBox (see the link in my signature) or play the floppy version.

Also, thanks for the detailed report.

Great! Thanks a lot, it works awsome! Now to do some tweaks to get the video to perform a little better.

Everything appears to be working great...with a couple of minor exceptions that maybe someone can toss a suggestion my way.

I am using the Ykhwong CVS build with the following options in the config file...
*************************************
[sdl]
# fullscreen -- Start dosbox directly in fullscreen.
# fulldouble -- Use double buffering in fullscreen.
# fullfixed -- Don't resize the screen when in fullscreen.
# fullresolution -- What resolution to use for fullscreen, use together with fullfixed.
# output -- What to use for output: surface,overlay,opengl,openglnb,openglhq,ddraw,direct3d.
# hwscale -- Extra scaling of window if the output device supports hardware scaling.
# autolock -- Mouse will automatically lock, if you click on the screen.
# sensitiviy -- Mouse sensitivity.
# waitonerror -- Wait before closing the console if dosbox has an error.
# priority -- Priority levels for dosbox: lower,normal,higher,highest.
# Second entry behind the comma is for when dosbox is not focused/minimized.
# mapperfile -- File used to load/save the key/event mappings from.
# pixelshader -- Pixelshader program to use for resizing: none,point.fx,bilinear.fx,scale2x.fx,2xsai.fx,scale2x_ps14.fx.
# usescancodes -- Avoid usage of symkeys, might not work on all operating systems.

fullscreen=true
fulldouble=false
fullfixed=false
fullresolution=1024x768
output=ddraw
hwscale=1.00
autolock=true
sensitivity=100
waitonerror=true
priority=higher,normal
mapperfile=mapper.txt
pixelshader=none
usescancodes=false

[dosbox]
# language -- Select another language file.
# memsize -- Amount of memory dosbox has in megabytes.
# machine -- The type of machine tries to emulate:hercules,cga,tandy,vga.
# captures -- Directory where things like wave,midi,screenshot get captured.

language=
machine=vga
captures=capture
memsize=64

[log]
# Message not Found!

logfile=logfile.txt
vga=true
vgagfx=true
vgamisc=true
int10=true
sblaster=true
dma=true
fpu=true
cpu=true
paging=true
fcb=true
files=true
ioctl=true
exec=true
dosmisc=true
pit=true
keyboard=true
pic=true
mouse=true
bios=true
gui=true
misc=true
io=true

[render]
# frameskip -- How many frames dosbox skips before drawing one.
# smartupdate -- Update dosbox screen only if its contents were changed.
# aspect -- Do aspect correction.
# scaler -- Scaler used to enlarge/enhance low resolution modes.
# Supported are none,normal2x,normal3x,normal4x,advmame2x,advmame3x,advinterp2x,interp2x,tv2x,hq2x.
# overscan -- Width of blended overscan border.
# overscanstrength -- Strength of blended overscan border (ratio of overscan color vs pixel color).

frameskip=0
smartupdate=false
aspect=true
scaler=normal2x
overscan=3
overscanstrength=2

[cpu]
# core -- CPU Core used in emulation: simple,normal,full,dynamic.
# cycles -- Amount of instructions dosbox tries to emulate each millisecond.
# Setting this higher than your machine can handle is bad! (unless timesynched is set)
# cycleup -- Amount of cycles to increase/decrease with keycombo.
# cycledown Setting it lower than 100 will be a percentage.
# timesynched -- Do not emulate more cycles than possible.
# showcycles -- Display the number of emulated cycles in the titlebar (uses some CPU).

core=dynamic
cycles=10000
cycleup=500
cycledown=20
timesynched=false
showcycles=true

[vga]
# svgachipset -- Select one of the following supported SVGA chipsets:
# s3 (default), et4000, et4000new, et3000, pvga1a, or none.
# Full chipset name (like 'Tseng ET4000') will also work
# as long as it contains one of the strings above.
# videoram -- Amount of video memory on emulated SVGA. Not all emulated
# chipsets support this setting.

svgachipset=s3
videoram=16384

[mixer]
# nosound -- Enable silent mode, sound is still emulated though.
# rate -- Mixer sample rate, setting any devices higher than this will
# probably lower their sound quality.
# blocksize -- Mixer block size, larger blocks might help sound stuttering
# but sound will also be more lagged.
# prebuffer -- How many milliseconds of data to keep on top of the blocksize.

nosound=false
rate=22050
blocksize=2048
prebuffer=10

[midi]
# mpu401 -- Enable MPU-401 Emulation.
# intelligent -- Operate in Intelligent mode.
# device -- Device that will receive the MIDI data from MPU-401.
# This can be default,alsa,oss,win32,coreaudio,mt32,none.
# mt32rate -- Sample rate of MT32 emulation
# config -- Special configuration options for the device. In Windows put
# the id of the device you want to use. See README for details.

mpu401=true
intelligent=true
device=default
mt32rate=22050
config=

[debug]
# Debugger related options.

[sblaster]
# type -- Type of sblaster to emulate:none,sb1,sb2,sbpro1,sbpro2,sb16.
# base,irq,dma,hdma -- The IO/IRQ/DMA/High DMA address of the soundblaster.
# mixer -- Allow the soundblaster mixer to modify the dosbox mixer.
# oplmode -- Type of OPL emulation: auto,cms,opl2,dualopl2,opl3.
# On auto the mode is determined by sblaster type.
# oplrate -- Sample rate of OPL music emulation.

type=sb16
base=220
irq=7
dma=1
hdma=5
mixer=true
oplmode=auto
oplrate=22050

[gus]
# gus -- Enable the Gravis Ultrasound emulation.
# base,irq1,irq2,dma1,dma2 -- The IO/IRQ/DMA addresses of the
# Gravis Ultrasound. (Same IRQ's and DMA's are OK.)
# rate -- Sample rate of Ultrasound emulation.
# ultradir -- Path to Ultrasound directory. In this directory
# there should be a MIDI directory that contains
# the patch files for GUS playback. Patch sets used
# with Timidity should work fine.

gus=false
rate=22050
base=240
irq1=5
irq2=5
dma1=3
dma2=3
ultradir=C:\ULTRASND

[speaker]
# pcspeaker -- Enable PC-Speaker emulation.
# pcrate -- Sample rate of the PC-Speaker sound generation.
# tandyrate -- Sample rate of the Tandy 3-Voice generation.
# Tandysound emulation is present if machine is set to tandy.
# disney -- Enable Disney Sound Source emulation.

pcspeaker=true
pcrate=22050
tandyrate=22050
disney=true

[printer]
# printer -- Enable printer emulation.
# dpi -- Resolution of printer (default 360).
# width -- Width of paper in 1/10 inch (default 85 = 8.5'').
# height -- Height of paper in 1/10 inch (default 110 = 11.0'').
# printoutput -- Output method for finished pages:
# png : Creates PNG images in the DOSBOX directory
# ps : Creates Postscript documents in the DOSBOX directory (default)
# bmp : Creates BMP images (very huge files, not recommend)
# printer : Send to an actual printer (Print dialog will appear)
# multipage -- Adds all pages to one Postscript file or printer job until ALT-F8 is pressed.

printer=true
dpi=360
width=85
height=110
printoutput=ps
multipage=false

[bios]
# joysticktype -- Type of joystick to emulate: none, 2axis, 4axis,
# fcs (Thrustmaster) ,ch (CH Flightstick).
# none disables joystick emulation.
# 2axis is the default and supports two joysticks.

joysticktype=2axis

[serial]
# serial1-4 -- set type of device connected to com port.
# Can be disabled, dummy, modem, directserial.
# Additional parameters must be in the same line in the form of
# parameter:value. Parameters for all types are irq, startbps, bytesize,
# stopbits, parity (all optional).
# for directserial: realport (required).
# for modem: listenport (optional).

serial1=dummy
serial2=dummy
serial3=disabled
serial4=disabled

[glide]
# glide - Enable glide emulation: true,false.
# port - I/O port to use with host communication.

glide=false
port=300

[dos]
# xms -- Enable XMS support.
# ems -- Enable EMS support.
# umb -- Enable UMB support (false,true,max).

xms=true
ems=true
umb=true

[ipx]
# ipx -- Enable ipx over UDP/IP emulation.

ipx=false

[autoexec]
# Lines in this section will be run at startup.
@echo off
rem mount c c:\
mount c h:\dosbox\c_drive
mount a h:\dosbox\a_drive
mount d f:\ -t cdrom #-usecd 1 -ioctl
c:\infinity\infinity.com
c:
*************************************
The graphics look beter now (still not like they were on a stand alone DOS machine, but tolerable) although they are a tad choppy/laggy.

The main problem I am experiencing now is when I save a game in TES:Arena the DosBox stops responding. It doesn't crash or hardlock as I can still switch it between fullscreen and windowed mode, but the saveing game msg appears in game and then it just hangs. If I kill the DosBox and relaunch it, I can reload the game at the point where I saved it, so the save works, but the shell hangs.

Any sugestions on how I can smooth out the graphics and how to get it to stop hanging up?

What is infinity.com?

infinity.com is an old program called Inifinity Machine. It runs in the background in memory. It is a variable editor program. When you are in a game, you can search for any variable location in memory and you can edit it. For example, you can give yourself a maillion gold/coin/credits, you can lock your hitpoints to become invulnerable, etc. Basically an old DOS version of a game editor/trainer.

Sorry for the question and to be off-topic,but I really would like to know.
I noticed Aristobilis wrote twice a very extended dosbox config.Had he to type it word by word,or are there some trick to do it easier and faster?
My thanks in advance.
Best regards,

uhm copy paste ?
there are more options in as ykhwong adds a lot of patches to his versions

Thanks,Qbix.
Best regards,

Try running Arena without loading infinity.com. A program like that is likely to make DOSBox unstable - especially with the dynamic core.

Also, make sure you are launching Arena while the DOS prompt is at the drive and directory that Arena is in and not somewhere else (it's possible that Arena is trying to save to the wrong place, such as the Z:\ drive)