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If you reinstall the official 1.05 patch over the steam version, the 1.06 patch will install but the game will ask you to insert a cd.
You should be able to fix this by getting the 1.05 cracked exe and installing the 1.06 patch over it. The game should run fine that way.
But before you do that, check if it's legal where you live. In some countries it's illegal to crack a game even if you own it.
http://forums.steampowered.com/forums/showthread.php?t=2951360
Then apply everything on this thread:
http://forums.steampowered.com/forums/showthread.php?t=2585744
BUT when you get to the part to patch 1.06, if you try it the normal way, you'll receive a message saying this RT3.exe doesn't seem to the correct type or something.
SO, go to here:
http://megagames.com/fixes/railroad-tycoon-3-5
Download the Cracked 1.05 patch, I've tested it, it's all ok, after applying it, install the 1.06 patch & you're all good to go.
Few tips:
Always try administrator mode to fix any problems.
Make sure everything is installed into the correct location (for steam it's different, it's under program files\steam\steamapps\railroadtycoon3 etc.
Everything should work!.
This is the patchlist for 1.06:
http://hawkdawg.com/txt/rt3/xtras/milo/RELEASENOTES.en.txt
http://forums.steampowered.com/forums/showthread.php?t=2585744" the link is dead.
Someone linked the internet archives of the missing links in the reply to my post here. In case anyone else is looking for this as I was