First, some copied info from the .nfo file from the above link .iso :
This package is an "hybrid install", witch means that I used a modified install procedure from ET's CD-ROM Ver.1.0, put the 1.2 engines from WarezArt in it and completed it with Maps & Textures from ET's CD-ROM Ver.1.1.
That's why my version shows 1.1 in the screenshot, but who knows what version is this "hybrid" : 1.0, 1.1, 1.2...
There are many cracks and updates in the .iso with no clear instructions what to do (complete mess), so after some tries and errors, I find myself this to be working :
1. Install from CD:\SETUP.EXE.
2. During the install procedure, select the "Custom" type of setup.
3. Uncheck the "Tutorials" and the "Rainbow Sentinel Lock Driver".
4. Copy CD:\UPDATE\MAXCRK1\3DSMAX.EXE to the main install dir and overwrite.
5. Right click 3DSMAX.EXE and set compatibility mode to Windows 98/ME.
6. When you run the program you will still get the error (you can close the error), but the application doesn't terminate.
7. Have fun