The out come was very successful which may indicate that the installer is to blame, being a mindless MS contraption.If as you say you have tried everything then in that case do a proper uninstall of XAMPP and make sure the services are uninstalled and the XCP is closed and all XAMPP components are stopped first.
Then try a fresh install and try a different method this time by downloading the zip version and simply extracting to the C:\ drive then run the setup_xampp.bat file.
When installed go to your XCP and click on the Svc boxes next to the components you want to start as a service then click on Start buttons.
I never use the installer version only the 7zip version and I had no problems at all with 1.7.0 on XP, works a treat following the above method.
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