I have to correct yozy on that difficulty bug fix. Game is fixed ONLY in GOG version, not in Steam version.
Here are MD5 hashes for GEOSCAPE.EXE, which contains the bug:
GOG (fixed) – EC31EDCA56BC8AF5A32ECEE5F08471EB
Steam (bugged) – 33EA0819E6888F0450F9A1E5E19DC98B
File is located in you game directory, under UFOEXE subdir.
GOG version is therefore way to go (as it always is, since it’s DRM free 😛 ).