I would recommend registering your copy and then updating Trinity to the latest versions, current version of Diplomacy is 1.34.
This is very stable, it is very, very unusual for the game to crash.
The diplomacy aspect comes into its own with larger maps, where there are more factions with more opportunities to form alliances against other faction(s).
It's easier to form alliances with a faction that is the same race as your own (racial inclination), however it is more useful to form alliances with other races as you can share each other's pacts.
These pacts can provide a significant boost to your empire & fleet, so I would say Diplomacy is well worth it.