TMO 1.7 is perfectly compatible with SH4 1.5 so it should work right away:
1. Did u enable it with JSGME?
2. I believe in TMO, the german campaign is called "U-boat missions". In RFB(which I have) it's called "German Campaign" so I can't really tell now
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3. Get one of the Atlantic mods, like Operation Monsoon.
4. Ignore the above and play SH3 instead if you want the true german experience (only if you're playing without automatic firing solutions).