Download and install VDMSound from http://www.ece.mcgill.ca/~vromas/vdmsound/ to get the sound working. If you have trouble with the mouse only working at the upper left corner then in war2.ini change vidmouse=0 to vidmouse=1 and it'll work.
http://www.ece.mcgill.ca/~vromas/vdmsound/

Just set in WAR2.INI option: vidmouse=1

works natively, even with sound if set correctly (use the General Soundblaster options), but since XP SP2, can't get network play to work at all (serial port connection used to work prior to SP2).

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