In windows 7 I think the game has to be run in compatibility mode, for Windows 98... try that (by right clicking the F1C executable) if you haven't already.
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Yeah I tried that in windows 8 setting the game in the compatibility mode it doesn't want to startup at all turn of compatibility mode it works, but doesn't like mods
I don't know if it helps, but I re-installed this out of curiosity the other day and found that file permissions were an issue - I had to remove the read-only flag from the whole directory before it would work properly. The same might apply to mods that you add, so maybe try resetting the permissions once you install something?