Note: I have the US Expert Software version of the game, other versions may differ. Here's what I did:

1. Made folder on Desktop called HOTD then copied entire contents of the CD-ROM into it.
2. Added setup32.exe into the HOTD folder, from the InstallShield 3 fix here http://www.reactos.org/forum/viewtopic.php?t=10988
3. RIght-click setup32.exe and set Win98 compatibility (or 95) so it doesn't complain the game won't work on NT.
4. Install the game.
5. On my Win8.1 the shortcuts aren't created, so right-click and drag some shortcuts from THOTD.EXE in the folder you installed the game into. If you double-click this file directly, it'll say it can't find the CD-ROM. Here's the shortcuts you can create:

Add this in the Target: window, after THOTD.EXE:
For Native DirectDraw version (you'll need to set compatibility tab to 16-bit colour first): THOTD.EXE -cd_nocheck -ddraw
For Direct3D version: THOTD.EXE -cd_nocheck -d3d
For Direct3D setup menu (to tweak settings before starting D3D): THOTD.EXE -cd_nocheck -d3d -d3d_setup

(FYI: these shortcuts are actually from the Registry, find them in HKEY_LOCAL_MACHINE/SOFTWARE/Wow6432Node/Sega/The House Of The Dead (the Wow6432Node part is only for 64bit installs).

6. As with most other games on Win8/8.1, the framerate will receive a big boost if you put the updated DDRAW.dll here into the game's install folder: http://www.blitzbasic.com/Community/post.php? … 77&post=1202630