There are numerous fixes and tweaks posted around here on how to run Mechwarrior 3 on modern systems but the simplest way in my experience has been using a program called DxWnd. I did not find this method mentioned on these forums so I thought I would make this little tutorial on how to set up and run Mechwarrior 3 with Dxwnd.
First Installing Mechwarrior 3:

1. If you are running Mechwarrior 3 from a CD make sure you install it using the CUSTOM option and include the AVI Files. You can also manualy copy the video folder from the CD to your Mechwarrior 3 installation folder (the Campaign.avi file is the important one). This will fix the issue with the Campaign.avi streaming poorly from the CD at the start of the Campaign and a possible crash. The installer may also suggest you to install DirectX 6.1 just Ignore/ unselect it.
2. Install the official 1.2 patch for the game.
http://www.sarna.net...rior_3/patches/
3. Make sure you do NOT have any compatibility settings enabled for Mech3.exe! This is important since dxwnd won't work correcly if you do. (Right click Mech3.exe -> Properties -> Compatibility.)
3b. If you have been using some other program like dgVoodoo to run Mechwarrior3 make sure you do not have any wrapper dll files in the Mechwarrior3 directory (e.g. D3D8.dll, D3DImm.dll, DDraw.dll, ) since they will conflict with dxwnd.
Now for the DxWnd part:
Download dxwnd from this site:
https://sourceforge....projects/dxwnd/
(version 2.03.91 as of writing this)
1. Extract dxwnd into some folder on your hard drive like C:\Dxwnd for example.
2. Start dxwnd.exe and choose Edit -> Add.
(it is recommended to run dxwnd with admin rights)
3. In the "Path" field click on the "..." icon and navigate to the folder where Mech3.exe is located and select it.
4. Uncheck the "Run in Window" option to run the game in full screen instead of a window.
- You may also keep running the game in a window if you like. In this case it might be a good idea to tweak the window resolution options to match your game resolution. (Window initial position & size)
- You can use the dxwnd option bilinear filter to imporve the image quality. ["DirectX" tab -> Filtering -> "Full Bilinear"] In order for this to have any effect the game must be running in a windowed mode.
5. Go to the Dxwnd "Timing" tab and set the "Frame per Second" option to "Limit" and a value of 30.
- This option will fix the bouncing APC's and other timing related issues that Mechwarrior 3 has on modern computers.
UPDATE:
If this does not work you may also need to enable the option "optimize CPU" in the "Main" tab. And also the option "Set single core process affinity" in the "Compat." tab.
6. Hit OK and start the game by doubleclicking on the new Mech3.exe entry.

How to fix the crash when targeting enemies that are close by on 1024x768 or higher resolutions:
1. Navigate to the Dxwnd "DirectX" tab and select the option "Force clipper"
(The option "Suppress DX common errors" might also help)
2. Navigate to the Dxwnd "Compat." tab and select the option "Handle Exceptions".

Optional:
Some computers may have issues with the actual 3D rendering in the game. This may be fixed by tweaking some additional settigns in Dxwnd:
step 1 (Try this first.)
Direc3D -tab
Direct3D tweaks > try all the checkboxes here.
step 2 (Try this if step 1 did not work.)
DirectX(2)
Ddraw tweaks > "Set minimal caps"
step 3. (The last resort.)
DirectX -tab
Emulation > "Locked Surface"
Edited by nice but dim, 11 December 2016 - 02:15 PM.