The key is to have a CONFIG.SYS file in whatever folder you mount as C:. And in the CONFIG.SYS, the instruction FILES=200. With that you get rid of the "Not enough handlers" error and the game finally works.
Works fine with DOSBox 0.74! (2012-11-21 17:22)
to install use the latest svn release (or a real dos)
Note: (2008-11-12 06:38)
Not enough File / System handles message when launching Installer or Game.