when you open cd 1 with a virtual drive, it acts as if you put in the actual cd, then you need to install the game normally (not copy all the contents of the cd to a folder like you did)
autorun should pick it up but if not go to my computer, find the virtual cd drive with it, right click and hit autorun or find the install in the files yourself
when the install prompts for the next cds just load them up and select the drive they are in from the cd prompt
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