I've read through numerous threads concerning this topic:

"The following codec(s) must be activated before using the application:
MPEG-2
Click ok to activate or Cancel to abort."

I've spent 3 hours this morning going through the advice posted here:
XP: http://kb.roxio.com/content/kb/Creator/000086CR

I've followed the instructions thoroughly numerous times.

What other steps should I take?

Try this http://forums.support.roxio.com/index.php?showtopic=12074

Thanks for your reply. I've just removed all the registry keys, files and folders once again. I did a file search using "roxio" to make sure everthing was deleted but came up with the following .dlls:

CddbCleanRoxio.dll
CDDBControlRoxio.dll
CddbFileTaggerRoxio.dll
CddbMusicIDRoxio.dll
CddbPlaylist2Roxio.dll
CDDBUIRoxio.dll
CddbWOManagerRoxio.dll
ROXIO_CENTRAL33.EXE-00739DC4.pf
CddbCleanRoxio.dll
CDDBControlRoxio.dll
CddbFileTaggerRoxio.dll
CddbMusicIDRoxio.dll
CddbPlaylist2Roxio.dll
CDDBUIRoxio.dll
CddbWOManagerRoxio.dll


Should these be removed?

Secondly, I just started the new installation, but during installation, I get this error message:

The following products are not supported by the current operating system.

Roxio Creator BDAV Plugin

After I click on the OK button, installation continues but i'm not sure if the above message is of concern.