First, are you sure your Windows XP is virus / malware free? Did you perform a complete scan of your system?
VLC and RealPlayer should install with no problems, it appears something is messed up in your windows permissions.
Try installing the below codec pack, just to make sure it's not a codec-related problem. After that, you can use Media Player Classic (that comes with the pack) to play your files.http://www.cccp-project.net/