The file works perfectly fine; I re-downloaded it from here and ran it.
Do you have DirectX 9 installed on your computer? This one needs at least DirectX 9, I think.
How this is accomplished exactly within a 64k file, remains a half-mystery to me as well. It uses DirectX 9 API for graphics and sound rendering, all animations as well as texture generation takes place realtime, which is why you need a fairly powerful machine. None of this is readily stored in the file, since it would take up way too much space. On top of that, the file is compressed and unpacks its contents during runtime, when needed.
D2k
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