I've found references in various INI files to Fullscreen=0 - which to me would indicate the game is set to run in Windowed mode.
However, I can't get it to run that way, and it looks horrible fullscreened on my 22" Widescreen.
Any clue on how I can get it to run this way? DXWND and D3DWindower do nothing.

I shall make an epic revive because I'd also want to play this in windowed mode.

If you just want no big pixels, you can set VideoWidth and VideoHeight in outcast.ini to some other resolution (and make the file read-only afterwards). You will still get fullscreen mode, but bigger black borders

Tried already. Didn't seem to make it 1680x1050 though, even with the black borders.

I'd actually prefer windowed mode, I don't care about pixel size.