Thanks for the suggestions, I managed to fix the problem, which was twofold.
Firstly, I had omitted Windows Media Player from my nLite compile which is the MAIN reason why vids were not playing. This is a trap for young players when brewing your own version of XP with nLite - I followed the guide made by Spystyle however I missed the important bit of info that removing WMP was optional! Easy enough to install it after the fact, so it's all good.
Secondly, I had acquired a HDD with the basic setup already running and it turns out about 75% of the vids were corrupt. After 11Gb of downloads everything is now fine......