How to safely unpack an untrusted Delphi executable - Virus Cracking

I have a Borland Delphi 6.0 - 7.0 [Overlay] executable (file.exe) that I want to unpack to examine the contents.

This file is from an untrusted source, I believe it to be some type of virus.

Currently I have downloaded PEiD to identify the exe file as written in Borland Delphi 6.0 - 7.0. I have downloaded Sandboxie and I was planning on running PEiD unpacking tool whilst in the sandbox. PEiD states that if I choose to unpack the Delphi file that it will execute the file, obviously I don't want this to happen.

If I am using PEiD in Sandboxie will it be safe to execute this possible virus, specifically:

If the virus executes will any files be restricted within the sandbox?
Can the virus alter any system settings and/or other applications / settings?
Is there anything else I should worry about while cracking viruses like this?
Are there free alteatives to Sandboxie and/or PEiD that would be more secure?
I have disabled Windows Updates so may OS and coupled software (Windows FW) may be out of date - Should this be of conce?

Currently I have Avast installed with Windows FW enabled. I believe my router may also have some type of FW but I am not sure.

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