Hi, I doubt that this a hardware issue but i'll try to help you.
Enter your WMPlayers options/preferences and under file types check all the boxes.
This should re-associate any file types that Nero has stolen from WMP.
You should also make yourself acquainted with the Nero website........
http://www.nero.com/eng/support-faq.html
Browse at your leisure and read the tutorials.
Wish I could be more help, but I dislike Nero and any other software that tries to "take over" my Operating System. Real Player and Adobe software are similar.
Anyway, good luck!
Here's a couple of links for useful Codecs...
http://www.nandlstadt.com/codecpack.htm
http://www.divx-digest.com/software/xp_codec_pack.html