I thought I would confirm a few things.
My Compatibility Fix is fully compatible with Windows XP SP2 and has nothing to do with this problem as a few people have asked me about this.
The cause of the 16 Bit Windows Subsystem problem is that the Version of the InstallShield installer used to install X-Wing vs. TIE Fighter and the Windows versions of X-Wing and TIE Fighter uses 16-bit code to start the installer then changes to 32-bit code once the installer is loaded. It is the 16-bit code that causes the error if the Autoexec.nt and/or Config.nt files can't be found.
Seeing as this is more than an isolated problem, would people like me to add generic copies of to the fix to help out Windows XP SP2 users?
Any suggestions would be welcome.