Most ntvdm errors can be fixed by modifying the TEMP and TMP environment settings to make them 8.3 namespace compatible.

The default path for the TEMP directories is %USERPROFILE%\Local Settings\Temp

Which will (typically) expand to something like:
C:\Documents and Settings\Administrator\Local Settings\Temp

16 bit applications can’t manage the spaces or long file names, and will generate ntvdm errors, even if they are not explicitly referencing the TEMP directory.

You can either use a common temp location (e.g. C:\Temp) or use the short version of the path. For the Administrator ID, the short filename path is C:\DOCUME~1\ADMINI~1\LOCALS~1\TEMP

Your can check these names by using ‘dir /x’
The variable settings can then be changed for each user by going into

My Computer -> Properties -> Advanced -> Environment Variables ->
Set TEMP and TMP to c:\temp or the short filename version

You should also consider the PATH environment variable, and any INI files that may be used. The short filename for the "c:\Program Files" directory is "c:\progra~1"