Okay. So basically what I did was pop my Mercs CD in, installed Mercs 95 v1.05. Then I applied the 1.1 patch from the resources forum. And over that, I downloaded and ran the MechProxyPatch files (over here:
http://sites.google.com/site/mw2mercxp/).
First, extract into MERCS directory, then run the MercsProxyPatcher.bat. Fiddling around with MechPrep afterwards doesn't do a whole lot apparently.
Finally, set the compatibility for mercswin.exe to Windows 95.
It runs but there's some HUGE issues like I mentioned:
- After a mission, the interface palette glitches and debriefing screen is totally black
fix: click on the menu at the top to go to Combat Variables screen then right click out of the Combat Var. screen to go back into the fixed debrief screen
- During the sim, parts of the world flicker in and out of visibility even though they are in range
no fix? I applied the visible range patch to 1600 meters, but it didn't glitch like that before in v1.05...
- In combat, weapons are insta-hit for some shots and sometimes they register a hit on your own mech, I notice this happens only at a certain angle (relative to the gameworld)
no fix

, I haven't actually died because of this but I have lost a few limbs when 2 PPCs decided to blow right as they were leaving the slots on my mech
- INCREDIBLE lag when you turn on ANY texturing (or even when you see it, even though it's off)
no fix: for the DC missions where you have to venture into a city to destroy the third floor office, the buildings are textured whether you have it on or off and if you approach the city the lag becomes so intense that the sim turns into a slideshow... this should NOT happen on a PC that was made a full 10 years after the game's been released...
- Momentary lag when dynamic lights appear; firing of any weapon, there's a lag when the dynamic light is rendered...
no fix.
- Game crashes randomly when receiving a radio message...
fix: re-run the game, it sometimes goes through and doesn't crash
- Game crashes at the second ice ship mission when you try to render the boarder mechs (they look like TV static...) and the game crashes
NO FIX, I had to abandon a game because of this, no way out of the mission alive...
Other than that haha it seems to be okay I guess. I really wished the 1.1 patch was more playable, it'd be much much more enjoyable if there weren't so many showstopping bugs. I have to say again the dynamic salvage adds a lot to the game. Hope all this stuff helped someone