So I decided to do something about it and wrote this guide on how to set everything up. It's pretty lengthy and requires some software to download, plus you need to own the retail discs but it gives very satisfying results.
DOSBox 0.74 - dosbox.com
Grand Theft Auto Retail CD - Amazon.co.uk
Alcohol 120% / PowerISO / etc. (or similar that can rip to .bin and .cue) - Google
Notepad++ - Notepad-Plus-Plus
Bat to Exe Converter - F2KO.de
Grand Theft Auto London 1969 Retail CD - Amazon.co.uk
Grand Theft Auto London 1961 Free Download - Rockstar Games
First step is to set up a directory for your GTA games to be installed to. For ease, I set mine up in the Documents folder (C:\Users\your_name\Documents\Grand Theft Auto). Download and install DOSBox into this folder, then use your retail discs to install both the original Grand Theft Auto and (optionally) London 1969/1961 into a folder called GTA, along side DOSBox. So far you should have this..
|\Grand Theft Auto\ (Parent Folder)|
--\GTA\ (Contains gtadata, gtados, gtawin etc.)
--\DOSBox-0.74\ (DOSBox installed inside here)
Next, use PowerISO or any program of your choice that can rip discs to the .bin and .cue format, and rip the Grand Theft Auto disc as "Grandtheftauto.cue" & "Grandtheftauto.bin". Place both of these files inside your GTA folder, we'll need them later so the music works when you play the game because they are treated as .cda audio tracks, just like a regular music CD.
Going back to your GTA folder, look for the "GTA.BAT" file and make a copy of it, renaming the copy to "GTA24.BAT" and open it up in Notepad++ or your own favourite text editor, regular Notepad works fine too. You need to make this one easy change, replace "k.exe" with "GTA24.exe" so it looks like this..
Save the file and close it. That's the batch file done!
Now we need to make a few changes to the DOSBox configuration file, "dosbox.conf". To generate this file, first you need to go into your Grand Theft Auto\DOSBox-0.74\ folder and run DOSBox.exe. It'll open up a black MSDOS style window with "Z:\>" flashing, don't worry though, you don't need to do anything here. You can go ahead and close DOSBox now because running the program has generated the configuration file for you.
To find this config file, it will most likely be in your "Local" directory. This is something that started with Windows Vista, it's how programs deal with files like these now. To get there, click on the address bar in your Documents folder (so it says C:\Users\your_name\etc) and type %appdata% then hit enter. Now you'll be in the "Roaming" folder by default, so you need to go up one folder to "Appdata" (click on it) then into "Local" and then "DOSBox".
There's the dosbox-0.74.conf file! Copy (not cut) and paste it back into your "\Grand Theft Auto\DOSBox-0.74\" folder.
Using this copy of the .conf file, rename it to "gta.conf" and open it in Notepad++ or your own text editor.
In the first [sdl] section we're only going to change a few values.
These allow the game to be played in it's original full screen mode, while at the same time keeping the 4:3 aspect ratio. Now we need to add some more strings at the very end of the file, so scroll down to the bottom. Find where it says..
# Lines in this section will be run at startup.
# You can put your MOUNT lines here.
and replace it with this..
mount C ..\GTA
imgmount D ..\GTA\Grandtheftauto.cue -t iso
Allow me to explain what this nonsense actually means. "autoexec" means that it's code that is automatically activated when you start DOSBox, so we need to tell it what game we're loading (GTA). The "mount C ..\GTA" means we're using the previous directory and then the GTA folder as our emulated C:\ hard drive. "imgmount D etc." is the game disc that we ripped earlier being emulated as a CD-ROM drive so the music will play in the game. Then "C:\" and "gta24.bat" activates the GTA folder and then launches the game using the batch file we made earlier. Simple, right..?
Almost done. Now you need to go back to your first Grand Theft Auto folder that contains the GTA and DOSbox-0.74. Make a new Text Document here and call it "Grand Theft Auto.bat". Be sure it doesn't include the ".txt" extension. It should be ".bat", not ".bat.txt". You may have to change your folder options if you can't see the file extensions. Again, open up this new .bat file in Notepad++ or whatever you like and copy-paste this into it..
DOSBox.exe -conf "gta.conf" -noconsole -exit
Then save and close it. At this point, you could just use this new .bat file you created to play the game, but I prefer to turn it into a real .exe with the icon so it's more authentic. To do this, you need to use the "Bat_To_Exe_Converter.exe" program. Under Batch file:, select your "Grand Theft Auto.bat" and Save as: should auto fill in as "Grand Theft Auto.exe", if not just type that in. Click on the Versioninformations tab, then with Icon file: you can navigate to the "gtados" folder and select the Grand Theft Auto icon, it's the one that looks like buildings in front of the US flag. Then just hit Compile and you're done, your new .exe for launching the game will appear in your original "Grand Theft Auto" folder.
You can use the same method to run GTA London 1969 and 1961, since you have all the files installed to the "\GTA" folder. You'd just need to rip the London retail disc to get the music, give it a different name such as "GTALondon.bin/.cue" and mount it in the same way that we've done here. Create new .conf and .bat files for the London launchers and you're sorted.
..I feel as though I've typed so much that I may have missed some minor details out. I hope this detailed (if overbearing) tutorial helps people run the game as authentically as I like to but please don't hesitate to ask for any more help.
I adore the original Grand Theft Auto and I want as many people to enjoy it as possible.