Windows won't expand .cab files

Say what!? Well, that's what appears to not be happening.

I removed a hard disk from 486 PC, and put in a Pentium 166MHz PC, and tried to boot it. It did, and as you might expect as it was booting it said "Windows has found new hardware, and is installing software for it" (something like that anyway). But, it did not install software for everything it found. Of the things that didn't get installed properly that were of most interest to me were the ethernet card, some other PCI stuff, and the video adapter.

I sort of expected it to have problems with the NIC, but I had a floppy for that. But, eventually, Windows "wants" the CDROM disk. And, that's were the problem is for the NIC, the other PCI stuff, and the video adapter. I would get messages to the effect that it could not locate some file, like abc.sys, for example.

What I finally did was this: every time I got such a message I would do a "Find" on the ".CAB" files on the CDROM. When I found the appropriate CAB file I would extract the entire file to a folder on the C: drive. Then, I try to "Add New Hardware" again, and I tell it to look in that folder. I kept doing that over and over and over, every time I got a file it couldn't locate. Whew! But I eventually did get the NIC drivers installed, the video drivers, and this other PCI thing. But WHAT A PAIN!!!

What is going on here? Or, perhaps more appropriately, what is not going on here? Why won't windows "dig into" those CAB files on the Windows CDROM, and get the files it needs?

Thanks for "believing ", and thanks even more if you've got an explanation and solution.