This makes the game work on XP and Vista...probably Windows 7 too but I can't confirm that because I don't have it...Also I think in Vista most of these things need to be ran as administrator...
1. Before doing anything download cubanraul's Blood Omen Patch:
Mirror 1: http://www.megaupload.com/?d=RVL5GB55
Mirror 2: http://www.4shared.com/file/_8IUQawg/KainSetup.html
2. Put the CD in and exit out of the menu screen....you won't need it.
3. Run cubanraul's patch....this will install the game and patch it to a degree.
4. Download wrance's Blood Omen Patch:
Mirror 1: http://www.megaupload.com/?d=8F6L48XP
Mirror 2: http://www.4shared.com/file/Uh9nw3DX/bo1_patch.html
5. Open your install folder (usually C:/Games/KAIN)...Replace the Kain.exe with the one in the zip.
After doing this the CD is only needed to watch the movies...if you're not bothered about the movies you don't need the CD...