diff --git a/source/readme.txt b/source/readme.txt
index 4336b8a481..d719724228 100755
--- a/source/readme.txt
+++ b/source/readme.txt
@@ -1,7 +1,29 @@
-- download http://oss.sgi.com/projects/ogl-sample/ABI/glext.h , put in compiler's include\gl dir
-- leave out debug* for now (requires dbghelp, included with vc7)
-- leave out memcpy.cpp, unless processor pack installed (not currently used anyway)
-- don't define D3D8 unless the SDK is installed (=> less accurate graphics card info)
-- dito for DDRAW7 (=> video card memory size not available)
-- set code generation to multithreaded
-- set entry point to entry (=> 
+Workspace settings:
+________________________________________________________________________________
+
+Compiler settings:
+- set code generation to multithreaded (+debug if desired)
+- set entry point to entry
+________________________________________________________________________________
+
+Includes:
+- download http://oss.sgi.com/projects/ogl-sample/ABI/glext.h ;
+  put it in GL subdir of compiler's include dir
+- add dir containing tex.h etc. to the compiler's include path
+________________________________________________________________________________
+
+Xerces (required for the GUI, which can be omitted ATM)
+
+download Xerces binary from http://xml.apache.org/xerces-c/download.cgi ;
+put the DLL in bin in your system dir, or in the game's dir;
+add its include dir to the compiler's include path
+________________________________________________________________________________
+
+Files to leave out, as they aren't necessary ATM, and require compiler support:
+- debug* (requires dbghelp, included with vc7)
+- memcpy.cpp (requires VC6 processor pack)
+________________________________________________________________________________
+
+NB: earlier steps that are now unnecessary:
+- adding .lib files - now taken care of by the code, via #pragma comment(lib
+- installing DX7 SDK - detect code now uses stock Win32 and DX3 calls
\ No newline at end of file