For Installing The Elder Scrolls II : Daggerfall, take the following steps
1) Use the GOG.com version of the game
2) Install The Elder Scrolls II : Daggerfall
3) If there is no Daggerfall CrossTie available, then install an Unlisted Application
4) Install the Bottle as Windows 7 32-bit.
5) wait and complete the Install from GOG.com using the setup executable from GOG.com.
6) After the Installation, Daggerfall is ready to play.