I have Windows XP Home Edition version 2002 OEM with no service packs.
I have no idea what caused the problem and it started about...3 months ago.
Basically, if I try to execute any stand-alone application (an app that has no dll files etc with it) the following error message comes up:
mp10setup.exe has encountered an error and needs to close etc. blah blah blah.
It always seems to happen to self-extracting SFX archives and sometimes even to applications like NTFS Disk Defragmenter.
Any suggestions? (I'll try ANYTHING!...Except downloading updates from Microsoft)

You have a seriously borked Windows installation.

mp10setup.exe is the installation file for Media Player 10. You've obviously got a botched install of that, and it's affecting a lot of other Windows functions as well. You need to either perform a refresh install, or even better wipe the drive and start again.

Your problems obviously stem from the problems which arise from running Windows without installing security updates, and the intrusions and system corruption that are inevitable under such circumstances. If you are reluctant to install updates because you mistrust Microsoft, then you are your own worst enemy.

If you are reluctant to install them, on the other hand, because your Windows installation is not a legitimate one, then you have two choices:

* spend some money on a legitimate copy
* learn to be a competent rogue rather than an incompetent one ;)