If your original XAMPP installation was successful then the php.ini file would have been located in the apache\bin folder.
Make sure you don't have another instance of php installed on your PC that may be interfering with the XAMPP instance which has often happened in the past by other members - Eclipse etc. and other such php programs often have their own inbuilt php and who often place a php.ini file in the Windows folder.
To recover your XAMPP installation it may be better to install again, a fresh installation has been known to have solved these unusual issues - XAMPP is designed to 'work out of the box' with no user tweaking necessary.
Stop all XAMPP components and uninstall any you have running as a service including the XAMPP Control Panel - check using the Windows Task Manager that there are no apache and/or mysql files still running in the Processes tab.
Then delete the xampp folder - this is a recommended uninstall procedure so a clean fresh install can be performed, never try and install over the top of an existing xampp folder.
If necessary download a fresh copy of XAMPP from the Apache Friends web site, preferably the latest 1.6.8 version - and my personal choice is the 7zip installation process or the zip archive method as I can see what files exist before I install XAMPP, also I am still on XP and have not downgraded Vista.
Now install again and check before doing anything after the install that the php.ini file is in the apache\bin folder.
Then go to the XAMPP Welcome page http://localhost
and see how it looks now.
BTW your image is very big width wise which is causing this thread to horizontal scroll unnecessarily and is a real pain if this thread gets much bigger, which makes it very hard to read - is it possible to reduce the dimensions to fit the forum thread width please?