Here's how to get Lands of Lore: Guardians of Destiny running on a Windows 7 PC (and using DOSBox) with an ATI graphics card. Nvidia cards may require further tweaking to fix graphical glitches. Not sure if this will work for other versions of Windows but it's worth a try.

After starting DOSBox:

1) mount c (your game directory) -freesize 500000
(this limits the virtual drive size, since the game's puny 1997 brain can't comprehend the size of modern hard drives and will crash out when it sees one)

2) mount d (your DVD or CD drive with the game disc) -t cdrom

3) run "setup" from D:\

4) When asked to specify the cache size, choose 83000

The installation should now complete without crashing and the game can be run normally through DOSBox without any further fiddling