once the ISO is extracted from the RAR I then use Daemon tools to load the ISO.  I run the autoplay and it pops up and asks me if I would like to install Outpost v1.5 I click on yes and the old school installer box pops up and is quickly followed by a windows message

"The second part of Sierra's setup was unable to execute.  Please try running _SETUP.exe in your TEMP directory.  If this fails contact Sierra Technical assistance for help."

about 30 seconds later the computer gives an error sound.  Upon inspection there is a new folder "PROGRAM" on the C:\

There is no _SETUP.EXE in any temporary folder anywhere on the drive.  There doesn't appear to be any corruption in the ISO.  I'm fairly confident that if I could extract the resource.000 file I'd be able to manually build the install.  Just to be on the safe side I'm re-downloading the ISO.

V1.5 is supposed to work with windows XP, but it seems to be giving me an error like it's a Win 3.11 install.   Anyone else had this issue?

It's funny, I've never had problems with OP1 but a lot of folks do. Maybe remaking the ISO will do?

Yeah..  still same problem after downloading again..   Now if somebody took the installed file structure and files and zipped it into a seperate download for all to use in the case of an install problems....   :-)  any volunteers?

A few questions

You say your running Win XP

Which service pack?
Do you have any av / spyware-blocking software like Norton etc installed that may cause some issues

Next thing is that your 16bit compatibility files may be corrupted

try copying   autoexec.nt and config.nt, from
C:\Windows\Repair

to

C:\Windows\System32

then running the installer again

It is common for windows xp to modify and therefore corrupt those two files