Hmm lets see, which question to answer first...
Because the CD has an option to install the game onto the computer, it would appear that it is a Windows version of the game. It runs only on full screen mode, but I dont think that is compatible with recent versions of Windows. Apparently it is a limited edition of the game, as Ive been told it was only released here in Australia.
Yes the music is directly from the game CD, and are only heard if you keep the CD in the drive when playing the game. Whichever file type the songs are I am not sure, as I just ripped the songs straight from the CD onto the computer and converted them to MP3 format.
Both versions are from the same CD. The only real difference between them are simply different filenames (with the 4 special levels having their own seperate names in the second version). The first two tracks from the first version are not included in the second version (I actually have no idea where those two are from as I dont remember hearing them in the game).
Yeah the fading out is how they sounded originally, even when playing the game. They actually had a longer fade out sequence, but I shortened that (the only editing that was done for the songs besides removing silence periods). I think the music did loop with the fading out, but there was some silence between each loop as thats how the files were like originally.
I hope those answered your questions