DirectPlay actually works with Windows Vista, 7, 8 and I think 10 as well, but in Vista Microsoft removed the VOIP feature from it which appears to be what prevents a host session from starting.
This fix basically tricks the game (and any old DirectPlay game on your PC) into assuming that DirectPlay VOIP works, it won't, but there are plenty of better ways to use voice chat now anyway

I have rewritten the instructions slightly for H&D and made it slightly clearer but all credit should go to Firedragonweb on the Steam Forums:
- Download - Copy the dll in that rar file to a simple directory, I recommend your H&D Bin directory where the exe is
- open a command shell as Administrator(start menu: type cmd, right click, click run as administrator)
- Switch to %Windir%\Microsoft.NET\Framework\v2.0.50727\ (type: cd %Windir%\Microsoft.NET\Framework\v2.0.50727)
- Register the dll. (type: regasm [Insert Your H&D Directory Here]\DvoiceEmul.dll /codebase)
- There should be some warnings and finally it should tell you that the types have been registered successfully.
- You should no longer have errors when clicking Host using TCP/IP Networking and should be able to host a game.
- If you wish to move or delete the dll file, you must first regasm [Insert Your H&D Directory Here]\DvoiceEmul.dll /u to unregister it.