The obvious fix is just to delete the ddraw.dll from the game directory...
The first message box you should have seen would have read "Display Failure!", "aqrit's compat mod".
From there I return an error code to the game which is why you see the msgbox that was posted.
The likely culprit is not WinXP but your graphic card.
It must support 2.0 Pixel Shaders and a 1024x1024 8-bit luminance surface.
I also force hardware vertex processing "pure device" for no apparent reason... maybe your card doesn't support that?
Make sure you have DirectX9.0c install and no weird options set in the registry, etc.
I'll try to add more error messages sometime in a future version.