1C support have referred me to Ubisoft. I wonder who they'll refer me too? I'm not giving up on this. As far as I can see the game is still supposed to be compatible with Win XP. Maybe they never tested that, and so a fix might be possible. In the mean time I've reinstalled and rediscovered the patched and merged Pacific Fighters.
One thing is still bugging me. When I first selected CoD it said it was being updated so it ran more efficiently under Steam. After that the latest official patch was downloaded. Did anyone else notice this? I can't help wondering whether it was the Steam update which was flawed, not the patch.
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