You may also need to check if you are using the video card drivers for the vendor (ATI/Nvidia). Depending on the make and the age you may not have the drivers and can only play it in Direct Draw 2 (software mode).
In the Wine menu in the applications menu you should see an option to configure wine. You can adjust the settings for each window program installed and set up certain conditions for the program (run in Windows Xp mode or which sound settings.
Here are some troubleshooting information from the Wine HQ. It has the information that Ophion gave.
When wine is installed it should be easy to install Diablo. Likely all you need to do is insert the cd and click on the install/setup to install. It will likely create a desktop icon to launch the game if not it would be in the wine menu and then in one of the folders in the wine section.
I have not used the Virtual Box. The site should have the information on using the program.
You also have another option is to not use Virtual Box and install Ubuntu directly into Windows. It installs like a windows program and can be uninstalled in windows. I have not used that feature. I believe you would need to restart the computer and then you choose Ubuntu at the start. I think this method might be easier.
The location where it wants to load looks like it is not protected from Windows.
I would explore the CD and not let Windows launch it automatically. I would right click on Setup or install icon in the cd and choose run as administrator. It might be that windows/antivirus might be blocking the access to the registry.
I would also try installing without the antivirus active (make sure you are not connected to internet and to remember to turn it back on after install)
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On Strike and supporting Fallout 4 Mod Makers
Some fallout 4 mod makers have had their mods stolen and uploaded and downloaded on Bethesda's site for the Xbox One.
I know someone at the Keep is having the same issue with Diablo 1 on windows 7.
In the control panel where you can control preferences for the desktop. Change it to Windows Basic.
It looks like it is crashing during the Install. It might be that windows is blocking the program from installing in windows. Try installing the game directly to c:/games or some other folder. If it is still crashing it could be that Windows 7 is not compatible with Diablo 1. Remember Diablo 1 is about 15 years old
Rollback Post to RevisionRollBack
On Strike and supporting Fallout 4 Mod Makers
Some fallout 4 mod makers have had their mods stolen and uploaded and downloaded on Bethesda's site for the Xbox One.
Please support them.
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In the Wine menu in the applications menu you should see an option to configure wine. You can adjust the settings for each window program installed and set up certain conditions for the program (run in Windows Xp mode or which sound settings.
Here are some troubleshooting information from the Wine HQ. It has the information that Ophion gave.
http://appdb.winehq.org/objectManager.php?sClass=version&iId=3498
http://www.virtualbox.org/
Here is a link for Ubuntu.
http://www.ubuntu.com/
You will need to download and use burning program to burn the ISO to a disk. You will need to use a program called Wine to install and play Diablo
Here is the link about Wine and Ubuntu.
https://help.ubuntu.com/community/Wine
When wine is installed it should be easy to install Diablo. Likely all you need to do is insert the cd and click on the install/setup to install. It will likely create a desktop icon to launch the game if not it would be in the wine menu and then in one of the folders in the wine section.
I have not used the Virtual Box. The site should have the information on using the program.
You also have another option is to not use Virtual Box and install Ubuntu directly into Windows. It installs like a windows program and can be uninstalled in windows. I have not used that feature. I believe you would need to restart the computer and then you choose Ubuntu at the start. I think this method might be easier.
Here is the link for the Windows Installer
http://www.ubuntu.com/desktop/get-ubuntu/windows-installer
I would explore the CD and not let Windows launch it automatically. I would right click on Setup or install icon in the cd and choose run as administrator. It might be that windows/antivirus might be blocking the access to the registry.
I would also try installing without the antivirus active (make sure you are not connected to internet and to remember to turn it back on after install)
In the control panel where you can control preferences for the desktop. Change it to Windows Basic.
It looks like it is crashing during the Install. It might be that windows is blocking the program from installing in windows. Try installing the game directly to c:/games or some other folder. If it is still crashing it could be that Windows 7 is not compatible with Diablo 1. Remember Diablo 1 is about 15 years old