OK.. thanks to the steady work of Methos and Denniz, we found the problem that I was having with the "ASSET CONDITIONS" problem. I am posting AGAIN to let some of you know what the problem was, and how to avoid it for yourself. I can't believe that I am the only person that this happened to, but here is what seems to have happened.
1. I installed the game from the CD's
2. I linked to the "CHECK FOR UPGRADE" on the "ADVANCED" menu and the patch ran and installed on my game.
3. I put the HOF patches in
4. Started the game in "Custom Game" mode
Then there was nothing but trouble with my game and having the assets work properly in HOF mode. The problem was that even though I ran the patch (and even at Methos' request RE-RAN it from the PATCH folder in my game where it re-ran the "install" for the patch" the GAME WAS NEVER PROPERLY PATCHED. The version was STILL version 1.61 as installed from the CD.
"What can I do??", you ask! Well the solution turns out to be very simple, even though I haven't the slightest idea WHY the problem occurred. In that same ADVANCED menu, the top menu item is "ABOUT THIS GAME". If you run that it is not the normal list of people and programmers and etc. Instead it SHOWS THE VERSION YOU ARE RUNNING!!
For this reason I suggest each person doing this.
1. Install the game from the CD's
2. Link to the "CHECK FOR UPGRADE" on the "ADVANCED" menu and run the latest patch install.
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3!! CHECK YOUR VERSION via the "ADVANCED", and "ABOUT THIS GAME" to verify that the version is the level required for the HOF installation. (later this also will show if you have the HOF mod installed)
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4. DL and install the HOF patch from Civfanatics
5a Modify your Desktop Icon to properly link in the HOF
OR
5b Modify your .ini file to set it for the HOF mod
OR
5c Start the game and go to advanced and select the HOF mod .. this will require the game to restart
NOTE: I find the modified desktop icon 5a. to be the best by far as you can just click the way you want to run Civ right from the start with one click and there is no fooling around with restarts PLUS you can easily run HOF mod OR plain vanilla with equal ease ..

But that's just my opinion.
6. Start your new HOF game in "Custom Game" mode with the HOF mod linked
If you do all these things, your way to HOF games should be easy and simple..
Thanks to Methos and Denniz for all their patience and help!!