Israeli Air Force installs fine on XP SP2 on my machine. And it runs fine as well. Unfortunately, the MENUS are not usable. Or rather, some of the key ones aren't usable. Particularly, anything on the "configuration" page. Clicking any of those results in either a lockup or simply no action. Not sure why not.

I've tried it with both hardware and software graphics. Mind you, the game can be played just fine with the default configuration... joystick but no throttle, rudder pedals, etc... but I know that under 98SE it COULD be configured to run with those, soo....