This is not an official upgrade. it has been doctored from an original alpha version which microsoft are creating for vista only. So be wary if you use it.
Trainz is designed for DirectX 9, so DX10 will not really make that much of a difference, if at all. DX 10 was designed solely for Vista, and as far as I know, Microsoft currently has no plans to make it run on XP.
As psycho_aussie said above, Trainz uses DirectX 9 so therefore DirectX 10 will have no effect.
DirectX 10 was designed for Vista as it made changes in the Graphics Architecture with the introduction of WDDM (Windows Display Driver Model). DirectX 10 relies on the WDDM infrastructure and WDDM drivers to function correctly, mainly due to Vista supports virtualizing graphics hardware to multiple applications and services.
I would be very careful with the above "patch" if it is real.