JSI Tip 5099. How do I troubleshoot 16-Bit Windows programs in Windows XP and Windows 2000?

Microsoft Knowledge Base Article 314495 contains the following summary:

Many different 16-bit programs designed to run under Microsoft Windows 3.1 have been tested with Windows XP. When you troubleshoot a 16-bit Windows-based program that is not working properly under Windows XP, consider the following items:

If possible, verify that the program works correctly under Microsoft Windows 3.0 and Windows 3.1.
Note that if the program requires a virtual device driver (VxD), it will not work properly under Windows XP.
Ensure that a default printer has been selected in Control Panel. Some programs (such as Microsoft Word version 2.0 for Windows) do not function properly under Windows XP unless a default printer has been selected. Some older 16-bit programs require that you select a printer within the options of the program.
Make sure that any dynamic link libraries (DLLs) used by the program are both current and locatable by the program (either on the system path or explicitly defined within the program or working directory).
Make sure that the default items contained in the Config.nt and Autoexec.nt files are present and in the proper order.

In Windows XP, Config.nt contains the following commands by default:
    dos=high, umb
Autoexec.nt contains the following commands by default:
    @echo off
    lh %SystemRoot%\system32\mscdexnt.exe
    lh %SystemRoot%\system32\redir
    lh %SystemRoot%\system32\dosx
    SET BLASTER=A220 I5 D1 P330 T3
Any environment variables required by the Windows-based program should be located in the Autoexec.nt file; if they are, Windows will use them appropriately.

Note that if any changes are made to variables related to the Windows 3.0 or Windows 3.1 subsystem (Wowexec.exe), you may have to restart the computer for these changes to be implemented.
Determine whether Windows has been installed as a stand-alone operating system or as an upgrade of a previous Windows 3.0 or Windows 3.1 installation. If it is an upgrade, information from the Win.ini and/or System.ini files may have not been correctly copied into the Windows Registry database.

To resolve this issue, you may have to either migrate these settings again or reinstall the program that is not working.

For help with migrating program information into the Windows Registry, query on the following reference words in the Microsoft Knowledge Base:
migrate and Win.ini
Run the program in a separate memory space. To do this, edit the icon or shortcut properties: On the General tab, click the Advanced button, and then click to select the appropriate check box.

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