This question popped up this week and it brought back a lot of memories of beat my head on a 16bit apps in the Citrix world.
Here are some things to tshoot when trying to make a 16bit app work on a 32bit server.
1. Try to run the app in compatibility mode
2. Remove the /3GB switch (Install Shield v16bit does not understand it)
3. Confirm GPO settings: "Computer Configuration \ Administrative Templates \ Windows Components \ Prevent access to 16 bits applications is not configured
4. Also check this out – only recent KB I found on 16bit apps: http://support.microsoft.com/kb/937932/en-us
5. Check
->HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\FileSystem\NtfsDisable8dot3NameCreation (1)
->HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\FileSystem\Win95TruncatedExtensions (1)
6. setup the 16bit environment as per
http://support.microsoft.com/kb/305521/en-us
http://support.microsoft.com/kb/324767/en-us
Expand (D: is CDROM)
-> expand D:\i386\config.nt_ %systemroot%\system32\config.nt
-> expand D:\i386\autoexec.nt_ %systemroot%\system32\autoexec.nt
-> expand D:\i386\command.co_ %systemroot%\system32\command.com
Follow these for further info
7. Lastly check on a working machine what this values reads: HKLM\SYSTEM\CCS\VirtualDeviceDrivers\VDD. Remove any value to this (backup first) and try.
