Firstly have you tried running Caesar III in compatability mode? It works perfectly fine on my XP pc but maybe you need to try running it in Win2k mode which I have to do to get Pharoah running on XP and Vista. If Win2k doesn't work maybe try an earlier one.
Try quitting on auto-install and start the compatibility wizard and and select to use the programme in your cdrom. You may have to disable visual themes as well. Make sure the desktop icon is also set correctly.
I have both Caesar IV and Children of the Nile, but don't like them the same due to the camera angles and zooming and stuff. After playing the 'flat' games it's just not the same.
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