Just some more academic discussion, not really trying to solve the original problem anymore:
tburger: So to sum up our experiments: it looks like OP has a very good chance of running IWD via Wine installed on Linux run by virtual computer (VMWare or VirtualBox) that is installed on his Vista 64bit. Because of multiple emulation layers – the more powerful PC - the better.
I decided to try VirtualBox as well, running Ubuntu 12.04.1 on it. In both VMWare Player and VirtualBox, the problem for me is to scale small resolutions so that they fill the whole screen (preferably still keeping the correct aspect ratio, e.g. black bars on the sides for 4:3).
For VMWare Player, the only workaround I found was to set both the host (Win7) and guest (Ubuntu) OS desktop resolutions to the same as where the game runs, ie. 800x600 in the case of IWD. This is a cumbersome workaround, but at least it works. I'm not sure if it is applicable to 640x480 games, as at least my desktop cannot be forced to lower than 800x600.
I googled for it, and many people have asked the same, but there haven't been clear solutions. I tried some (like editing some ini file) with no success, but I have no idea if it was because those suggestions came from many years back from older VMWare versions, or maybe even the Workstation version. Some e.g. said you should set some option in the view menu... too bad that at least my VMWare Player does not seem to have any "View"-menu.
As for VirtualBox, there is e.g. the View => Switch to Full Screen / Switch to Scale Mode, but they don't seem to work correctly for me either. I think in the beginning I once saw the Ubuntu 1024x768 desktop being stretched to fill the whole screen, unfortunately distorting the image (4:3 => 16:9, it didn't keep the correct aspect ratio). For some reason at that point I wasn't able to select any other resolution for the Ubuntu desktop besides 800x600 or 1024x768.
I think later VirtualBox asked me to add some extra stuff for Ubuntu, or maybe it was related to the VB Extension Pack? (I presume it is similar extra stuff like VMWare Tools for Linux) Anyway, after that I was able to set also higher resolutions for the Ubuntu desktop, but the screen would not scale anymore. All "scale mode" seems to do now is to switch between full screen and window mode, showing the Ubuntu desktop still in a small window in the middle of the screen.
Note: From some instructions I got the impression that in order for the scaling to work, 2D acceleration must be enabled in the VB options. But then it was apparently also said that 2D acceleration is only supported if the guest OS is Windows, it doesn't work for e.g. Linux?
tl;dr: Have you been able to get the screen scaling to work correctly with VirtualBox (or VMWare Player)?