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The Settlers 2 is slow paced strategy game developed by Blue Byte in the late '90s. You take control of a group of settlers and attempt to establish an economy.
The game features a slightly complex resource system and is combat light. I'd say it's best to look up a guide on how to play.
Overall The Settlers 2 is good for killing long stretches of time.
The game should run under XP but you should use VDMSound to get the sound running, you can find it at the BuildXP.Deathmask link in the OP.
Also, I failed to mention that you can use DOSBox, a DOS emulator to get most DOS titles running on XP. But you need a fast machine for it.
Enjoy.