To get steam UT99 working nicely in Win7, do the following once the game is installed:

1.Install patch 451b:
http://downloads.unrealadmin.org/UnrealTournament/Patches/Windows/UTPGPatch451b.exe
C:\Program Files (x86)\Steam\SteamApps\common\Unreal Tournament

2.Install this much better OpenGl Renderer:
http://www.cwdohnal.com/utglr/utglr36.zip
C:\Program Files (x86)\Steam\SteamApps\common\Unreal Tournament\System

3.Start the game and select OpenGl as your preferred Rendering device

4.Setup your in game resolution, controls, player name, etc.

5.Play the game

This method should also work with the cd version of the game. The only difference there would be your install paths.
Default install paths for the cd version are c:\Unreal Tournament