The mdkw95.exe runs fine for me on win XP Pro SP2 after changing the mdk.cfg file as others have indicated before. I don't know about any of the other problems except for....
I was having the problem when trying to run the mdkd3d.exe version where the program would prompt for the CD. Found the hex tweaks on some other sites to convert the various executables to no-cd, but the mdkd3d.exe version with this archive didn't match. Downloaded the mdkd3d.exe patch fresh from the net. While the tweak instructions matched for this executable, the tweak didn't work. It got past the CD check, but got hung up on "MDK Executable Version Is Incompatible with MDK CD."
So...I did some research, disassembled the code and made a proper no-cd tweak based on the fresh mdkd3d.exe that you can download from the net. I have no idea what's going on with the mdkd3d.exe file that is in the archive provided here. It's not the correct size, and it made my disassembler choke.
First, get the official mdkd3d.exe file from your favorite game site. Here's a link:
MDK D3D Patch
It should be exactly 671,232 bytes long.
Use your favorite hex editor to make the following tweaks:
Offset: 1D3F
Change: 0F 84 D2 00 00 00
To: 0F 85 D2 00 00 00
Offset: 1E54
Change: 74 CA B8 5C 30 49 00
To: EB CA B8 5C 30 49 00
If you don't have a favorite hex editor, try this one:
xvi32
The switch to D3D doesn't make a huge difference in the visual quality so no big whoop there, but it is nice to have the f2 save key.
Enjoy,
m6oo