Ok I just spent a day trying to get Duke to run on my XP machine for the better part of 2 hours. I did a yahoo and learned that unlike every other windows version XP is not based on DOS. IE it cause some funky backward compatablity problems.
Now i know how console gamers feel
This is just a shot in the dark, but maybe you can try to use a dos boot disk. That might work. (But it’s only worth a try if you have your harddrive FAT32 formatted, NTFS won’t work)
There’s a program out there called DOSbox that attempts to emulate DOS under XP/2k. I’ve tried to use it for some other DOS games with minimal success.
Here’s a URL:
Actually, none of the Windows NT based operating systems are compatible with DOS. Windows NT 3.5, 4.0, Windows 2000, and Windows XP are all based on the NT kernel instead of DOS.
missing_link has it right - you’ll need to boot good old DOS. If you have the game installed on a FAT partition, you can just use a boot disk. But if your only partition is NTFS, you’ll need to make a FAT partition and install it there. If your entire drive is filled up with NTFS, you’ll probably have to buy Partition Magic (or some similar program) to resize the NTFS partitions.
From the DOSbox FAQ:
If you want it “smooth or fast or whatever”, emulation isn’t the way to go. 
“Compatible with DOS” should probably read “compatible with DOS programs that directly access your hardware, like most games do”. You can still run boring DOS programs like edit.com in Windows XP.
I tried it just now on my brother’s machine (XP Home SP1) and “works for me”. It’s not even running in compatability mode. (Though the SFX don’t wanna work well. I’ve been making my own. :D)
You don’t list any error messages so it’s hard to guess, but you could check out this guy’s site. He seems pretty hard-core about maximizing compatability.
VDMSound Sourceforge helps sort out the Sound Hardware issues. Works for me.
Simon