I need to decrypt the files that contain information about the
private keys.. Can any one guide what is their encryption method...

These files are present at the following location...

All Users\Application Data\Microsoft\Crypto\RSA\MachineKeys

Plzzz Help...

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You need the passphrase to decrypt that file. I don't think there is any practical way to decrypt it otherwise since it uses very strong encryption and it would probably take longer than the universe has left to exist to break it via brute-force methods. Why do you need to do this? Did you get (buy, borrow, steal) it from someone else, or did you just forget your passphrase?

I dont want to break the cipher. I am the administrator of the machine and I need to extract the information present in this file.. I need to do it for my project, I am a student... Plz help me ....

"all files in the RSA folder are automatically encrypted with a random, symmetric key called the user's master key. The user's master key is generated by the RC4 algorithm in the Base or Enhanced CSP. RC4 generates a 128-bit key for computers with the Enhanced CSP (subject to cryptography export restrictions) and a 56-bit key for computers with only the Base CSP (available for all Windows 2000 computers). The master key is generated automatically and is renewed periodically. It encrypts each file in the RSA folder automatically as the file is created."

reference: http://technet.microsoft.com/en-us/library/cc962112.aspx

What I have studied so far is:

Well, RC4 is not (these days) particularly strong - you already know more than I do about the implementation on Windows. In any case, it should be susceptible to a brute-force attack, and the actual encrypted data may allow a cryptographer to determine what set of hash values to start with. In any case, this is outside of my field. I have a dilettante's understanding of modern cryptography, not an in-depth one. Keep Googling - you should find more information about this on the WWW.

it seems that Only the person who has the corresponding private key can decrypt the information

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