For quite a while back in '98 PzC was my fave game too. I played it as soon as I came home from work until I went to bed and then again all weekends.
But alas, as soon as XP came out PzC worked no more.
It was then I gave Panzer Elite a try...and never looked back.
Anyway, apparently some players have found success by turning off the "real physics" option. It doesn't come without side effects though, but at least it
may get the game running for you.
Oh, and of course, don't forget to run in Win95 compatability mode.