Thank you all again for the input. Its been really useful gettings some other opinions!

Firstly, AB2012 & timppu massive thanks for the help with suggesting the fixes and wrapper use for Dark Forces 2 Jedi Knight! I tested both suggestions and both work great! It was so nice to play with 3D acceleration again and now I am playing with these mods and I must say I am buzzing being able to play this again without the fuss of running an older OS.

I hear what a number of you have said with regards to the hardware being too recent and I agree, it was just an idea to use some spare kit I have which I don't think I will bother with now especially as there seems to be fixes available for most games that do throw up a problem

No problem. If you need any help with any other games, just shout. I considered a "retro rig" before, but was lucky enough to manage to get every game I own running on W7. Modding communities that produce compatibility patches, new installers, widescreen patches, etc, are worth their weight in gold.

I recall reading once that Nvidia never released Windows XP drivers for later video cards. So, you might not even be able to install drivers for the video card you have under XP.

How does the game run for you with dgVoodoo2? Did you use some other fixes too mentioned by AB2012, besides just dgVoodoo2?

For me, dgVoodoo2 seems to introduce some odd sluggishness to the game's controls, and also some pauses or jittery in graphics.

If I play the game in the software rendering mode (640x480@8bit) instead, the controls and graphics are totally fluid, as they also are if I play it on Windows 7 with 3D acceleration enabled (no dgVoodoo2 needed or used on Windows 7).

dgVoodoo2 has worked great for me in Windows 10 for some other games like e.g. Might & Magic 9, but for some reason there is this issue with Dark Forces 2.

Well I tried the dgvoodoo2 method first and it worked great. Upscaled to 1440p and the game ran well with 3D Acceleration and I didn't notice any problems.
I did also try the fixes AB2012 suggested and they too worked really well. I have installed a couple of mods that make the game look more like a Quake 3 engine game and they work really well but I did find they did have a tendancy to be a bit unstable and for me at least I think the original graphics add something to the game that gets lost with the HD texture packs.

The downside with Virtual PC 2007 and Virtualbox using Win95 and 98 is direct 3D acceleration doesn't work unless someones made a fix. Using WinXP it only goes as low as DirectX 8 with Virtualbox