Step one... Launch Steam, Verify Integrity of Game Cache for GTA-VC ...done

Step two... Close/Exit Steam ...its not needed.
NOTE: YOU DON'T LAUNCH THE MOD or v1.0 no CD, WITH the STEAM client!

Step three....navigate to the gta-vc folder...
drive letter:\Program Files (x86)\Steam\steamapps\common\grand theft auto vice city

Step four
....as not to mess up your steam version, "copy" the
"grand theft auto vice city" folder to another location,
say "C:\grand theft auto vice city" for example.

Step five...rename the original gta-vc.exe that was moved to the new location "C:\grand theft auto vice city" for example to gta-vcold.exe.

Step six... go find v1.0 no CD .exe download...unzip the GrandTheftAutoViceCityv1.0NoCDFixedexeEng
and copy and place the gta_vc.exe from that folder into the new folder location "C:\grand theft auto vice city" for example, where you just renamed the old .exe

Step seven...get the mod client vcmpclient0.3zr2(patch2) from http://vicecitymultiplayer.com/. and unzip it.

Step eight...Run the vcmpclient0.3zr2(patch2).exe installer, direct it to to your new folder location "C:\grand theft auto vice city" for example where you placed the no cd .exe in it.

Step nine...you should now see vc-mp.exe in your "C:\grand theft auto vice city" launch it Run as Administrator" it may ask for the location of the gta-vc.exe, just direct it to your new folder "C:\grand theft auto vice city"... you should now see the server list browser.
Select the internet tab at the bottom, it will refresh the server list. Pick a server with lowest ping # and with people, the game should launch and load you into the server.

Source: http://forums.steampowered.com/forums/showthread.php?t=1257290