Well going by your instructions but tweaked a bit...

DOSBox says MOUNT C "/media/mmc1/DOS/FALLOUT/"

when you run a setup through RubyBox... so I put in the bat file similar syntax for CD-ROM...

mount d "/media/mmc1/DOS/FALLOUT" -t cdrom
fallout.exe

and it still says "Could not find the master datafile. Please make sure the FALLOUT CD is in the drive and that you are running FALLOUT from the directory you installed it to.

aaargh.