I had not played Paraworld since I switched to Windows 7 (or Vista even) because I simply could not get the game to work. Years later I found a blog post explaining how to get it to run on Windows 7. However, the download link for the fix the blog provides is no longer working and the post only mentions Windows 7. People looking for solutions to get Paraworld to run on Windows 8 or Windows 10 probably will not find that post. Thus, I reuploaded the fix (which you can get here) and created this post so people can find it.
But how do I get the game to run?
Step 1: If you have ParaWorld installed (and it is not working), uninstall it.
Step 2: Install the game, but DO NOT use the default install path. Use something like C:/Games/Paraworld or similar and install the game into that folder. The default path seems to cause issues.
Step 4: Download and install the fix.
Done! You should now be able to launch and enjoy ParaWorld again.
I do not know where this fix came from, who wrote it or how it works. I have been using it for 2+ years now and have not had any issues with the game. However, your results may vary.
Something to watch while you are fixing your game install
It looks like YouTube user Oliver Lugg had faced the same challenges with ParaWorld and newer versions of Windows. But he managed to get the game to run on Windows 10 using this post and posted a great review of this gem from 2006.