Oh I know its been asked..... BUT.....
 

Ok, here it goes.

I bought a new computer last year to play SH4. Its a vista beast. I never could get SH3 to work, no matter how many times I followed your guy's steps that you posted. I started to get jealous and flustered.
Then out came Windows 7. Hearing there was an XP mode, I pretty much pooped a torpedo in excitement at the hopes of getting my favourite game up and running! For days I dreamed of sinking tankers and dodging corvettes. Then the coveted day came, and I spent my 300 dollars to get 7! After much downloading to get the "virtual XP" mode, I installed SH3. I watched the game merrily install, and I thought, SCREW YOU CHURCHILL!!!! Its Gerry time!!!!
Then came the bad mood..... clicking to activate the game, it informs me I need a "release copy of XP" to run my game!!!!! Devistated, I call a buddy that can find more than just porn on a computer to help me out. After a beer and alot of head scratching, I hear from him the words I didnt want to hear. "I dont know"
Can someone PLEASE PLEASE help me so I can get back to this great game after over 2 years away!!!

Cheers guys

Not a answer, but; a link to another captain in your position, some seem to be having success within his thread.

http://www.subsim.com/radioroom/showthread.php?t=153900

Kind regards

Venatore