I then selected 'troubleshoot program', then selected 'The program worked in earlier versions of Windows, but won't install or run now', Then I choose 'Windows XP (Service Pack 3)'. I then right-clicked the 'LEGO Racers' Desktop shortcut (the icon is a little lego wheel!) and selected 'troubleshoot compatibility'.
I ran the Lego Racers Installation setup. Then I found the specific 'Setup' Application file in the 'Lego Racers' folder (NOT the 'setup' BMP file or the 'SETUP' Configuration settings file). I mouted the ISO file in Daemon Tools Lite.
Which then left me two items (one being a 'LegoRacers' folder, and the other being a 'LegoRacers' ISO file. It worked for me! I had to use a file archiver to properly unpack the zip file (I used 7zip).