sorry,guess things are not as simple as I have imagined them.after a bit of trial and error,I was able to put together a build that should work as specified in the FAQ. here (2x100MB,packed with 7zip):
http://www.sendspace.com/file/fulkfl
http://www.sendspace.com/file/k2d4wk
howto:
1) extract the RE folder from the archive to C:\games\
2) set residentevil.exe to win95 compatibility (that will take care of the first error you mentioned).
3) run the reg file.it will create the required entries in the registry so you will not get that "data damaged" error (the entries are in HKEY_LOCAL_MACHINE\SOFTWARE\CAPCOM\RESIDENT EVIL,to "uninstall" the build just delete the RESIDENT EVIL branch).
first,this will probably only work for xp (thats what I'm using).second,I had to remove most of the videos to cut down the size as much as possible,but the first three are included (MOVIE folder),so you should be able to get into the first few game screens as long as the movie path in the exe is properly modified.
thank you for your patience.