Well, i'm running on a Mac. Could you post a screenshot of the error please? are you sure you looked in the right locations for the ini files or that when you reinstalled, you installed all the files to the right place?
On my mac, those ini files are in Civilization III/art/units/settler, leader, etc. I don't have PTW, but from my experience with Civ IV, there should just be an extra folder ie. Civilization III/PTW/art/units.
it could also be that PTW isn't Vista compatible or that you need a patch to run it on Vista. I'll look into that.