Terror from the Deep is the sequel to X-COM UFO Defense that puts you back in charge of the international global defense organization, X-COM, except now the classic stereotypical alien/paranormal encounters have been replaced with aquatic Lovecraftian horrors and B-movie sea creatures.
The basic gameplay is very similar to X-Com: UFO Defense. In fact, you could call it a simple retheme with new graphics and not be too far off.
I prefer the setting, charm, aesthetics, and difficulty balance of the original, but the sequel does several things that I find to be nice improvements on the formula. There are a number of small gameplay improvements vs UFO Defense; for example, when you destroy an alien base, the game gives you a message saying so, instead of you having to abort the mission before seeing for sure that you destroying every base control panel section. You can also open doors without moving through them, a definitely useful feature. The terror sites in the original all used the same urban terrain set, while the terror sites in Terror from the Deep can use one of four different terrains (seaport, island resort, cruise liner, cargo ship), which is nice for variety. Alien sub designs are also more intricate and complex than the UFOs in the original.
Alien base assaults are a bigger ordeal, with 2 parts to the mission; first, you have to fight through the well defended surface entrance to the base, and then explore the comparatively empty inner levels. Melee weapons are fun and new to the series, and are very effective against some tough enemy types.
The biggest difference, though, is the atmosphere. The homage to Lovecraft is obvious throughout the game; even the general theme of "ancient mysterious aliens came to Earth many eons ago and are coming out of their hidden places in the deep parts of the world to reclaim it" is basically Lovecraftian. The alien architecture is reminiscent of Neo-Victorian era style science fiction and depictions of 20,000 Leagues Under the Sea era submersible technology and similar; there is a lot of brass looking riveted metal and almost steampumk-ish looking alien equipment. There are also hints at other undersea myths like the lost city of Atlantis, and the Gill-Man/Swamp Creature and other aquatic B-movie monsters. Compared to UFO Defense, the enemies are tougher, deadlier, and scarier, and the environments are darker and architecture more complicated. It's now harder than ever to keep your soldiers alive, which brings me to my next point.
The game is difficult. Very difficult. Terror from the Deep was designed to be hard for people who thought X-COM UFO Defense was easy on 'superhuman' difficulty. Weapon clips are much smaller, there are no infinite ammo weapons, and all weapons are designed for underwater use. Some of them, like torpedo launchers (Terror from the Deep's version of rockets) don't work at all out of water (terror sites). The fact that there are no land only weapons to use (like regular firearms) is annoying and makes the game more difficult, for sure. Speaking of water vs land weapon use, grenades can be thrown underwater as if through air. This may annoy you if you take notice of unrealistic physics in games.
I've mentioned that base assaults are long 2 part missions. Terror sites on boats are also big 2 part missions. You will have to kill A LOT of aliens to complete a boat terror site; it's quite an endurance test. Alien bases in particular are heavily defended and almost always deep enough underwater that the environment is dark regardless of the time of day. They can be brutal.
Now for as for the game's flaws; the fact that most of the game is underwater makes a lot of the environments feel a bit too similar, even though there are a variety of underwater terrain types. The colors blue and yellow are a bit overused and make the game's aesthetics a bit garish, especially when compared to the pleasingly colorful original X-Com.
Also, the game features the same somewhat cumbersome user interface and many of the same bugs as X-Com UFO Defense. The difficulty bug from the original is not present here, but the disappearing ammo bug still is (in the DOS version, at least. The Windows version fixed it). Aliens also like to carry around melee weapons, but they don't ever use them. Worst of all, if you research a couple things in the wrong order, it can make your game unwinnable by making some required research unavailable. Even if you don't screw up your research path, the research tree is more convoluted and requires more live aliens than that of UFO Defense, which can be frustrating because it's not obvious which alien types you need to research to unlock other techs.
Maps are, in general, larger. Bases and boat terror sites span across two separate maps instead of 1, and even UFO crash site maps are larger than they were in UFO Defense. The 2 part terror missions can be pretty tedious, and they can drag on forever. The boat maps feature more rooms and more complicated architecture than usually seen in X-Com games, and as a result, there will often be aliens standing around somewhere waiting for you to find them because they won't ever leave the room they started in. It makes for very long missions, and an overall long and drawn out game.
You can play the game by itself, especially if you have the Steam version that comes bundled with DosBox (The Steam version also includes the Windows version, in the 'TFTD' subfolder in the game folder). I recommend some mods, though. XcomUtil is a great simple mod that works for both UFO Defense and Terror from the Deep. It gives Gauss weapons infinite ammo (like lasers in UFO Defense) and fixes other bugs.
TftD Extender is a bit more extensive, and makes the game more playable, in my opinion. While much of it overlaps with XcomUtil, it also has options to make boat terror sites only 1 part missions, sub crash site maps a bit smaller (more like UFO Defense size maps), there are optional alternate tech trees, aliens can use melee weapons, and you can tell engineers to make and auto-sell equipment, among other features. With some tweaking, you can run both Xcomutil and Extender at the same time. I HIGHLY recommend using TFTDextender if you are going to play the game nowadays.
If you've always wanted to try a tactical turn based strategy game where you fight Lovecraftian horrors underwater, or if you are a big fan of the original X-COM UFO Defense and would like a very similar game with additional challenge and variety, then you should definitely try it. I prefer the original UFO Defense, but this game is unique and worth experiencing, in my opinion. (Don't let the difficulty scare you away; if you are very familiar with the first game, this game isn't much worse, except for the alien base assaults, which are absolutely brutal.)