I have had another E-Mail from Lucas Arts:
Thank you for your message,
We have received reports of various issues with our Windows 95/98/ME/2000 game titles from users of Windows XP. All of our original Windows 95/98/ME/2000 titles were developed and tested using only the standard Windows 95, Windows 98, Windows ME, and Windows 2000 operating systems. Currently our only fully tested, Windows XP compatible titles are "Star
Wars: Galactic Battlegrounds," "Star Wars: Starfighter" for the PC, and "Star Wars: Jedi Knight II: Jedi Outcast."
LucasArts cannot guarantee full compatibility of our original Windows 95/98/ME/2000 titles with the Windows XP operating system. Unfortunately, Indiana Jones and the Infernal Machine is not supported for use with the Windows XP Operating System. We've determined through customer input along with our own testing here that this game experiences various incompatibilities which cannot be resolved by means of standard troubleshooting.
We have had reports of some issues being corrected by installing Microsoft's Windows XP updates which are available by using the update Windows feature in the Start menu. I suggest you make sure to keep XP updated in case any such fixes also resolve issues which you encounter running Windows 95/98 titles in Windows XP. Other issues may be resolved by the release of updated Windows XP video and sound drivers from the hardware manufacturers, so we recommend that you keep your drivers up-to-date.
If we learn of any new information related to playing LucasArts Windows 95/98 games with Windows XP, we will post this information in the technical support section of our website (http://support.lucasarts.com
IMPORTANT: Please be aware that LucasArts Entertainment Company, LLC does not recommend making any changes to your system without first contacting your computer manufacturer about the configuration of your computer.
May the Force be with you, always...
Basically this means if your running XP and it doesnt work, then tough.