Just wanted to confirm that this does work. Win7 SP1.
Used the installer version of otvdm that Ivan pointed to. Installed ok. Created shortcuts for exile 1, 2, 3 and Blades.
All bar Exile 1 work without a hitch. Exile 1 keeps complaining outdoor.dat isn't in the same folder as the exe. The other three games, no problem.
I have made it work. For some reason, I have to open otvdmw.exe manually, it asks me to pick an exe to run. I point it to EXILE.EXE, game runs, I can create a party and start a game. I've finally been able to play Exile 1. (insert celebration here).
Chalked it up to the oddities that is the first game of a series.
