"i am running an updated windows xp, from ME this could be the problem"
You just answered yourself.
Installing Windows ME was one of the worst things I've done to my computer (besides that time I accidently formatted it using disk clean-up, but hey, I was 11 years old, and I didn't know what I was doing

). I'm glad that I borrowed the WinME disk off a friend, because it definately was NOT worth the $200 that MS were asking for.