grasshopperts: sorry, but that's pretty hard stuff you're saying. at least as this game is freeware today, a commercial release of it should work on most modern systems i think?!
Freeware? It's not available for free, that would be illegal. And it's a game that precedes even Homeworld, which is about the point when games actually started being cross-compatible, but Populous was all about hard coded changes that broke it on newer OS, so if it works on a PC, the user should simply be grateful it worked, because many can't get it working.
if you desperately want to play the game, you could always just get a Virtual Machine set up using Windows 98 or Windows XP. Users of Windows 7 Professional can use Windows XP Mode to get that VM if they so desire.