Ok, I spent a over 5 minutes trying to see a little of what is going on in this case.
First, I don't have XP so it is difficult to know exactly what is happening in your case.
My recommendations are as follows:
* If you haven't already try running a recovery on XP to validate or try to validate your core drivers. Related to this unload everything from memory or drivers that may create problems. This probably wont solve the problem but if it does then great.
* The game checks the registry settings under the following when installing:
HKLM\System\CurrentControlSet\Control\DeviceClasses
You need to monitor the settings when it fails and compare them against a working installation to see what is happening.
Also, you need to make sure you are really the admin. It could be that your registry is partially corrupted or that some of the drivers are not working.
I don't think I'll be able to provide too much more help as it really seems a lot of work just to make a game work.
Anyway, MS should be doing this not me. If you really think it is important, and are technically inclined then e-mail me and I may or may not help you troubleshoot this. But, it will very involved work.