No problem! So you are definitely missing some files somehow.

So lets go folder by folder, and find out where the issue is:

Base folder: 18 Files, 6.98MB

Audio: 14 files and 5 folders 240MB
Cinematic: 10 files, 0 folders 25.9MB
Database: 14 Files, 0 folders
Doctrine: 48 Files, 0 folders 57.5KB
Gamespy Arcade: 1 file, 0 folders 5.78MB
Graphics: 71 Files, 0 Folders 118MB
incoming: 1 file
Interfaces:389 files, 7 folders 300MB ( I suspect this may be the culprit?)
Manual:5 files 55.4MB
Scenario:69 Files (minus one, I have 1 custom one in there)
Tutorials:10 files, 254MB
World:28 files, 156MB

Let me know what you find....

OK, maybe the Steam file structure is different but my base folder ( C:\Program Files (x86)\Steam\steamapps\common\Dangerous Waters unless I'm misunderstanding) contains 673 files, 24 folders, Size on Disk 1.14GB.

My numbers are identical to yours, except:

Scenario = 67 files

Which either means you have 2 custom scenarios or I'm one stock scenario short, but this can't be the culprit, I reckon.

Much to my disappointment, my Interfaces file numbers are identical to yours.

There are some very small discrepancies between us in file sizes but I suspect that's because you may have read Size vs Size on Disk in a couple of instances.

I've read that Vista 64x and Win 7 64x do not support 16-bit software and in fact prevent execution. And yet others can run DW on modern systems. Another possibility is that this is a Steam thing, maybe to do with the location of the executable on the disk but I can think of no way to change that except to buy the boxed version. Do you have the Steam version too? Maybe that would explain the discrepancies (individual folder contents still being the same, though). I do not have a setup .exe.

I think most of the Win7/Vista issues came down to location--program files either being the problem or the solution, I forget which.
Is it possible to manually move the files and then adjust the registry to reflect that change?

Maybe I'm misunderstanding, but I had 679 (minus one for my custom scenario, so 678) and you have 673. So somewhere you are missing 5 files. Minus the two from scenario which shouldn't matter, that still leaves 3 files unaccounted for. Go back over my numbers, because they can't be identical to yours, or else the total wouldn't be different. I will also go back over my files when I can. I would make sure you are showing hidden files as well.

Also, I am running it from steam on Win 7 64-bit, so I know it can be done =)

Perhaps installing in C:\Steam\steamapps\common\Dangerous Waters instead of C:\Program Files (x86)\Steam\steamapps\common\Dangerous Waters might do the trick. Administrator is a nightmare in the latest Win applications so I install my program away from the Admin requirements.

I have DW installed on my brand new laptop Win 7 64 bit. DW works fine with the exception of wide screen graphics which it doesn't support,

To do this, he would have to uninstall steam, then re-install into a different directory...but i suppose it could be worth a try?

I made a file tree as you suggest, fearless, and moved the DW files from their default location in Program files x86, but the .exe will not run from here. is there some simple tweak I need to do, to the registry perhaps?

EDIT: Just saw johnnyr's post. Hmm. I don't really want to uninstall Steam and install to a different directory as all my other Steam games work well from within Program files x86.

I opened a help ticket at Steam. I hope they can advise re. solving this. Meanwhile you guys have been very helpful, thank you.