I've read and read and read...what am I doing wrong?

[RincewindTheWiz]

No, there should be a mods\bf1942 subdir UNDER your Battlefield 1942 directory, e.g. "C:\Program Files\EA Games\Battlefield 1942\Mods\bf1942\". That's where you put the mod.dll, OVERWRITING the old one. You clearly did something wrong, check in the right directory and of course make sure you patch the game to v1.2 first.