I saw your post a while back and meant to reply sooner. If you are the original person who posted that instruction sheet for installing Milkdrop, thank you! There is no chance I would have ever figured that out on my own.
Since that original installation however, I personally have been able to get Milkdrop running on every install of MC going back probably 10 versions now, but... with one major hiccup. After starting MC with a visualization set to anything other than Milkdrop (say Cover art), if I then switch to any other visualization that is not Milkdrop, it crashes MC instantly. That said, as long as I switch the initial visualization (from whatever) to Milkdrop first, then no problem. If I close MC with Milkdrop as the last active visualization, I can immediately switch to any other visualization without a problem as well. Once you've made the initial switch correctly, you can then switch amongst all the visualizations in any order at any time and there are no issues. Once you close MC and reopen it however, you have to repeat this "initialization" process to avoid crashes in the new MC session.
Aside from this particular anomaly, Milkdrop basically works fine - the cover art and song title are displayed for a few seconds when a new track begins. However, I have over 47,000 Milkdrop presets in various preset folders, yet it seemed to only recognize at most a hundred or so. I have checked the various Milkdrop options you can access while it is in use to see if I had anything set that would limit the presets used, but did not find anything that stood out to me. In an attempt to make Milkdrop see more presets, I took all of them out of the various segregated preset folders and moved all 47,000+ files into a single flat directory. This did seem to increase the number being used, maybe up to a couple hundred different presets, but nowhere close to the number of files that exist.
I am curious if you have experienced the same thing as me above and you just deal with it, or if you found a workaround that resolves it, or you don't have this issue it all.
In any event, I got pretty good at remembering to switch the initial visualization to Milkdrop as soon as I opened MC, but inevitably would still forget on occasion, and MC would annoyingly crash. I finally tired of dealing with this and have given up on trying to use Milkdrop anymore starting with MC 30. If Matt/J River are interested in trying to resolve this issue, I don't remember the exact error dialog, but it definitely was related to "loading a DLL file".
I should also point out this is also an issue when running multiple zones. If you activate Milkdrop in a zone while another zone already is already running Milkdrop, that will also instantly crash MC.