I'm very new to this game and would like to have a proper speedrunnable and casual plathrough copy set up of it. I have the steam version. I'm familiar with the hoops you need to jump through to get San Andreas to work as it should with downgrading and such, and I'm wondering if there is a similar process needed for VC (and perhaps III as well). At this moment, I can't seem to get dxdwnd to work with my copy (I get an error window which I'll post below) which isn't the end of the world for me but I would like it to work if possible.

When loading the game via dxdwnd I get "Application load error 5:0000065434"

Usually application load errors are fixed for me by reinstalling the game. As for having an "optimal setup" the japanese version of the game is the most optimal for speedruns. There is a converter that will automatically change your steam version over to the JP version here - https://www.speedrun.com/tools/vc_jp_converter_ub42v.zip

thank you very much my dude

That error is caused by launching the Steam EXE without Steam running usually.