I installed the game into a new XP bottle - fortunately I have two DVD drives so that got round the problem of changing the discs during installation. Once installed I ran the fan produced unofficial 1.042 updater. It was also necessary to add mscvirt.dll to the /Window/system32/ folder replacing the existing one. This is the same file required for NOLF2 which uses a version of the same engine.
To improve the game further the KA mod is worth installing. This will only install when patched to the unofficial 1.042 version and when the game has been run at least once. It add lots of improvement especially widescreen support (http://tronfaq.blogspot.com/2010/04/tron-20-killer-app-mod-v11-released.html).
One thing to watch is that save games from before installing the mod will crash the game badly - so badly that I needed to force quit CG as it couldn't force quit the bottle. To avoid this remove any old saves from the save folder and start fresh with the mod installed.
The only remaining issue is with the mouse - it works fine in the menus and does work in game but it judders around the centre position but then gets smoother after that. This makes the game harder to play.