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From your post all you did was update Windows XP to service pack 3. Is that correct? That would not change drivers, one would think.
Or did you do a full install of Windows XP SP3? The generic drives in a new install of XP will not be optimum for your video card. My guess is that you did a full install from scratch and lost the video drivers. Does that fit the case? If so, get the right drivers for the video from the maker of your computer. And you may need other drivers as well.
What model of computer do you have? Is it a Dell laptop?
Is the Windows XP you have an OEM version from the computer maker? Even OEM versions of XP do not always have all the drivers for a specific model.s
Also, have you ever tried another media player?