I downloaded the same image, but can't get it to work. I quickly see the first command of AUTOEXEC.BAT: "mode 40,r", and then it shows "Disk error reading drive A".
I tried directly with the td0 file, and I also tried converting it first into IMG format. The file size of the IMG is correct (40*8*512 bytes), but it still shows the above error.
I wonder if the driver expects 9 sectors per track? How would I fix this?
EDIT: It works with BIOS Revision 2 or older. Revisions 3 and 4 (default) show the disk read error. It's entirely possible that this would also have happened on the real hardware: Maybe IBM removed support for the old 8 sectors per track formatted floppies.