Hi Pappenheimer, thanks for your input.
You probably should test this with an extremely simple demo.
I am using a small room with 4 walls, ceiling and floor, with the default texture and a camera. Can't be simpler than that.

BTW, in your quite detailed description I'm missing the part about testing the exe before you renamed it and copied it into the windows folder etc.
I think we might be getting somewhere here:
As long as I copy/paste the
myscreen.cd folder with all its content (i.e. acknex.dll, d3dx9_30.dll, myscreen.scr, myscreen.wrs and palette), then the level runs fine when I double-click on myscreen.scr or myscreen.exe (if I rename it that way),
no matter where it is on the computer: on the Desktop, C:, /c:windows, C:windows/system or C:windows/system32, etc. So, that parts works perfectly.
But, when I just copy the
5 files contained in myscreen.cd (see above), and then paste them (so without a folder to hold them), then clicking on myscreen.scr does not work in
/c:windows,
C:windows/system or
C:windows/system32.
It does work however on the
desktop, in
C:, in
C:Programs Files, etc.